I’m lucky enough to have two beautiful children. My daugher is two-and-a-half years old, and my son is almost six weeks. More than a few people have mentioned college savings accounts to me, and to be honest, I haven’t even considered putting money away for school for them. Here’s why.
College Is Probably Only Worth It If You Have Very Clear Goals.
If one or both of my kids want to be a doctor, lawyer, engineer, teacher, or something similar, then I’ll send them to college. Several years of traditional schooling is currently the only track to one of those professional careers.
If my kids don’t know what they want to do (the vast majority of young people fall into this boat), then I will either delay college for them until they figure it out, or encourage them to seek alternatives.
Note that I do not believe that college is the place to figure these things out. I’d rather my kids spend time reading, learning, and exploring on their own for a year or two after high school than waste time and money taking a slew of introductory college courses in massive lecture halls, memorizing and regurgitating information spoonfed to them.
In my experience, kids that don’t know what they want to do with their lives, yet attend college anyway, spend much more time partying, sleeping, and otherwise goofing off than they do on their studies. Which brings me to my next point.
For Far Too Many Kids, College Is a 4 to 5 Year Vacation That They Don’t Deserve.
If my kids don’t enter college with clear goals, and aren’t pursuing a professional career that necessitates college, then the college experience amounts to little more than a multi-year vacation. Indeed, most students have a great time at college — not surprising considering they’re living with a bunch of their best friends. But there is such a thing as too much fun, which I witnessed first hand. A number of kids I knew flunked out of school. Many others simply never finished their education, or stuck around seemingly forever.
We have some data to back up my anecdotal evidence: only 59% of first-time, full-time college students who entered a four-year college program in 2006 graduated within six years. That means 41% still didn’t finish after six years. In the financial world, these people would be known as “write-offs,” meaning it’s very safe to assume they will never actually finish.
It’s worth noting that the more selective a college is, the more likely its students are to graduate. This seems like common sense to me, because elite high school students tend to also be elite college students. However, there could be other factors at play, because selective schools tend to be more expensive (although that’s not always the case), meaning that parents will probably put a lot more pressure on their kids to succeed when much more money is at stake. And speaking of money…
Given the Skyrocketing Costs of College, Getting a Good Return on Investment Is Becoming Very Difficult.
College is extremely expensive. According to the latest College Board data:
A “moderate” college budget for an in-state public college for the 2014–2015 academic year averaged $23,410. A moderate budget at a private college averaged $46,272.
This total college budget includes tuition, room and board, and all the other wonderful fees that anyone who’s attended college can explain to you via an expletive-riddled tirade. So let’s pick a nice, round number, and budget $30,000 per year for my kids.
Remember when we discovered that only 59% of new college students graduate within six years? Well, fewer than 40% of new students graduate within the traditional four years. So odds are, it’ll take my kids more than for years to graduate, if they ever graduate at all.
Let’s say it takes them five years to finish school. That means a total investment of $150,000 each, plus five full years of time where they’re earning almost nothing. What’s more, they’re unlikely to gain much real-world experience during this period.
That’s a whole lot of time and money, so it better be worth it! Isn’t it possible that there’s a better way to invest in my kids? As it turns out, yes.
There Are Great Alternatives to College, and Many More Are Coming.
In recent years, no-cost online education options have exploded. Here are just a few resources at kids’ (and adults’) disposal:
- Kahn Academy – Offers 100% free videos explaining over 2,400 different topics, from math to physics to computer programming to history. Most of these videos are produced by the very smartest people in the world, simply because they want to share knowledge with everyone, for free.
- Code Academy – Learn virtually any type of computer programming for free. Enough said.
- Coursera – Free online courses from the top colleges and universities around the world. Actual classes that students pay thousands of dollars for, except you get them for free.
- MIT OpenCourseWare – Arguably the greatest technology school in history has put much of its curriculum online for free.
- edX – Same deal, most MIT and Harvard courses are available here for free.
So instead of spending $150K to send my kids to college, they can learn literally the same exact things, in the same exact courses, online, for free. FREE. Did I mention all this stuff is free?
If college is strictly about learning, then it’s hard to justify paying for my kids’ education. As the online education world continues to evolve, we’re guaranteed to see even more free and low-cost options in the coming years.
When my kids reach college age in 15 years, will traditional college be necessary at all, or will a college degree still be the new high school diploma? Am I better off paying them $150K over five years to take a bunch of free online courses on their own, and design their own careers accordingly? I’d love to hear your thoughts.