Pay Less Now, Earn More Later

“College degree required.”

“College degree a plus.”

These phrases are often included in job descriptions and job postings. A college degree has long been the benchmark for intelligence, knowledge and achievement—of someone who has mastered a certain subject or specialized body of knowledge. Most management positions require some sort of college degree. But is a degree really the measure of knowledge and ability to do the job it’s cracked up to be?

Not according to William Bennett, President Reagan’s former secretary of education, who wrote the book, “Is College Worth it?” in which he claimed the high cost of higher education often isn’t a good investment. An article in the Christian Science Monitor posted on CNBC.com, “Former Ed Secretary: Only 4 Percent of Colleges Worth The Money,” discusses the reasons why some people should think twice about investing in four or more years of advanced education.

Here are some frightening statistics from his book:

• Just about half of all students that start a four-year college don’t finish. 
   
• Of those students who did graduate in 2011, nearly half are unemployed or under-employed.
   
• Americans owe more in student loans than they do on credit cards.

According to Bennett, only 150 colleges out of America’s 3,500 are worth the money. There are some Ivy League schools on top five, like Stanford, California Tech, MIT and Princeton. And parents are realizing that while the top schools may give a good education, the costs are too high for the return on investment. Parents are still high on education, but are changing the way they pick colleges, focusing on lower cost in-state colleges. 

Helping parents in their choices is the Department of Education’s College Affordability and Transparency Center and its “College Scorecard.” The Center provides a searchable database on colleges based on net cost, graduation rates and the student’s average monthly student loan payment after graduation. Individual schools are also now required to have price calculators on their websites. Instead of focusing on a brand name, parents can compare schools according to price. According to the article, when the price of an education at two schools is less than $1,000, parents focus on other things, like graduation rates. After all, the purpose of paying all those tuition bills is not to provide a child with a college experience but is about graduating with a college degree that will help that child get a job or qualify for graduate school.

Parents can look for schools in a particular price range, or by affordable, monthly student-loan payments, looking for something they can afford now and later. Bennett’s book has a list of value schools, where students can get a good education at a reasonable cost. While students still dream of going to a prestigious school like Harvard or Princeton, many successful people have attended a variety of schools, including junior colleges and technical schools. Attending a pricey, high-profile college doesn’t guarantee success in life.

While a college degree is mandatory for some professions, like law or medicine or engineering, many successful entrepreneurs have come from modest colleges, transferred to prestigious schools after living at home and attending local colleges, or even dropped out (like Bill Gates). Managers are guilty of looking for prestigious schools or at least a college graduation date on a resume as a requirement for an interview, even when a degree doesn’t really guarantee success or even aptitude for a job. 

It’s pointless to take a job when it doesn’t pay enough to pay the bills and provide a decent lifestyle. Choosing a college without knowing the cost is also pointless, since you may end up with the burden of paying for your education five or 10 years after graduation. Routinely requiring a college degree for every position may be a costly mistake for companies who, like some students, rely on a diploma than on their ability, drive and talent to be successful. 

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