That is the million dollar question, and I mean that literally not figuratively these days. Education costs have soared in recent years at a rate far greater than inflation. And with the U.S. population continuing to grow more students are seeking higher education. As a result Universities reap the financial benefits. The demand is high and the supply (number of seats) is low.
I’ve been having the great college debate with my buddy Brian, 33 years old, who recently went back to school. He thought a Bachelors degree from a premier school would unlock the door to a fat salary, but so far that has not been the case. In fact, in a well-known paper by Princeton economist Alan Kruegar and researcher Stacy Berg Dale at the Andrew W. Mellon Foundation they discovered the school itself did not translate to a higher salary.
It was discovered that salaries from students accepted to a top-tier school but electing to attend a less selective/more affordable institution, were similar. Bottom line, if you’re bright you’re bright and the cream will always rise to the top. Brian, for a smart guy, made a dumb decision and now has astronomical student loan bills from his “name school.”
Still, some will argue the name school attracts the most distinguished professors, and that your education is second to none. Also, the contacts you make during your college career can play a pivotal role in where you land in your professional career. At upper echelon schools you tend to rub elbows with dignitaries, royalty, and future industry leaders. So much of life is who you know and not what you know sadly.
Implicit benefits aside the price tag is still staggering for both students and parents even with scholarships and grants. It is a vicious circle. If you don’t go to school you have little chance of landing that high paying job, and if you go to school you may face so much student loan debt you default on your loans.
Another friend of mine entering his senior year at Boston College will graduate in May with just over $100,000 in student loans (both private and federal). He’s already reserved to the fact that he’ll either be living with Mom and Dad for the next several years or won’t be able to buy a house until he’s 40.
With a bachelor’s degree serving as this generations High School diploma it has certainly put students and parents in a precarious position. When my Dad reminisces of yesteryear he speaks of simpler times when everyone had a shot at the American dream. Today the American dream has turned into an unattainable nightmare for so many. Something needs to change.
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