What's a college diploma truly worth these days?

… at least $23,000 of debt, according to a recent study which shows that the average student owes that amount  after graduating from a four year college or university. This same research also shows that the debt levels for graduates have increased upwards of 50 percent in the last decade.

Yahoo Finance decided to take an interesting direction in this article, asking the question, is it worth it? Should more high school kids forgo college because the return just isn't worth the debt accumulated? I say, no way Jose to that theory. Here's why...

I remember graduating more than 20 years ago with about $20,000 in loans. I worked like a dog for very little $$$ over the first few years to survive in Manhattan. I remember thinking just how hard it was to make those monthly payments when times were really tough. Back then (yes, even in the old days), going to college was viewed as a prerequisite into the white collar job market. Unless you were a complete freak of nature like Bill Gates, no diploma meant no real hope of staying away from a career in some type of manual labor.

Fast forward a few decades. Today, a college degree represents (even more) basic table stakes into the professional world.  The only difference is that the Internet has created all new opportunities for some to bypass traditional jobs that college graduates used to need to begin burgeoning careers. Although success rates are slim, entrepreneurs exist at the earliest of ages, setting up garage-based, venture projects and companies with the hopes of creating the next Facebook or Foursquare.  Even with that new reality though, most fail.

So, where is this all going? We all hate the rising price of college education. Hell, I've heard that top private schools might actually cost upwards of $75,000 a year by the time my 8-year old twins are old enough for college. That is downright scary. But, even with all of that, the right type of college education is worth far more than the piece of paper handed out at graduation. And, its benefits go well beyond just providing enough credentials to obtain an entry level white collar job.

For starters, research shows that over a lifetime career, those who have a Bachelor’s Degree earn on average $2.2 million. That's in sharp contrast to those with just a high school diploma who only take home about $1 million. It's hard to justify bypassing college because of a $23,000 IOU (versus) the $1.2 million more one should make with a college education.

Now to the actual part that really matters. As I watch, converse with and listen to so many graduates today, I see how their teachers have taught them to think creatively, in ways that just wouldn't be possible with only a high school degree. I've also encountered some pretty impressive problem solving in the most challenging of circumstances, from recent grads who've only been in the workforce for a year or two. Lastly, the maturity level and social skills that are developed through that four year period can't be duplicated through any other experience in life at that age. Take away those four years of growth, and you'll have a large part of our society who can't deal with the day to day opportunities and pressures that go along with being an adult.

One simply can't measure college debt as a straight pass through investment, like most do after 10 years of medical school. The comparison is truly apples to oranges.  The rising cost of college will become a more acute issue in the decade to come because at a certain point, there will be very few parents who can actually afford to pay full tuition without any financial assistance. But, that's a completely different issue to be taken up in another post. The college experience cannot be replaced.  That is just reality.

Comments

[Steve]

I question that $23k figure. I had that much 20 years ago, and I went to a state college. My wife also had that much. Because the article uses the average or mean, I suspect the number is artificially low, pulled down by those who are lucky enough to have their parents pay their full rides, which is not necessarily the norm. I'd be more interested in the median debt, since that is likely a better reflection of how much debt most college graduates will start life with.

[Graco Sprayers]

It's sad how much time and effort go in to finding a decent job these days. I'm going to college and expect to be in 50k plus in debts when I graduate which is absolutely ridiculous. It will get paid off eventually and it wont be too bad since the job pays well but I don't think I would have minded jumping into a factory job like back in the day. At least then i would have the experience to know if I truly wouldn't like it and could make an informed decision whether I wanted to pursue a greater job or not.