What Should I Study in College that Will Get Me Out of Debt?

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We believe that college will help us get a good job. But does it always work out that way?

Sebastian completed a four-year college degree and followed that with an internship, making himself as appealing to employers as possible. He then spent two months searching for a job before landing a part-time graphic design position—which he could have entered with a high school diploma. “If I had known seven years ago that this position would have been available without the need of a degree, I probably could have gotten into it just as easily,” he said.

Worse, he doesn’t even feel confident he could find another full-time design job with his degree and years of experience. “There’s a trend emerging that internships are replacing actual paid positions. . . . I interpret this as a pattern of exploitation,” he said. “What’s being described now as an entry-level position requires the very experience that an entry-level position is designed to provide!” With such a job market, it’s as if his college education has had no impact on his employability.

John Boucher’s experience echoed his. It took him two years to find any work in his field, environmental science, and even then it was only a paid internship.

“My overall confidence about [finding a full-time job] is a lot less than it was . . . two years ago,” he said. “I’m . . . guessing it would take me at least a few months to line up another position, and it probably wouldn’t be as good as this [internship].”

There are also stories that show the opposite. During one of my interviews, I heard the sad tale of a woman who spent 30 years working at a prestigious hospital.[1] She had no college degree, but earned her way into the position of nurse manager with years of hard work.

Eventually her husband fell ill. She quit to take care of him, leaving the workforce for four years.

When she returned, the company she had spent three decades working for refused to take her back. They couldn’t hire her unless she had a bachelor’s degree.

For her, a degree would have made all the difference at that time.

But these are the stories of individuals. While they could just as easily be yours one day, the smart gambler doesn’t bet on getting a royal flush because he saw someone else get one. He bets on the odds.

Let’s take a quick breather by reviewing the financial facts so far. Here are the points in favor of getting a four-year degree:

  • Young people with bachelor’s degrees or better generally have higher incomes than they’ve had at any other point in US history.
  • An associate’s degree or partial college education means less than ever before.
  • Those with only a high school diploma are at the greatest disadvantage they’ve ever had to those with bachelor’s degrees or better.

And here are the points against getting one:

  • College is more expensive than ever before. We can expect it to be more expensive next year than this year, and far more expensive for the next generation than this one.
  • At the same time, graduates are more likely to be unemployed or impoverished than in the past. They also face an obscenely difficult job hunting process.

In other words, both the pros and cons of a college education have grown significantly.

Let’s not jump to conclusions yet. We still have a few more factors to consider, such as . . .

Does Which School You Go to Matter?

Stanford, Harvard, Yale . . . there are a handful of colleges so famous that they have become household names. Even a family that has no interest in technology or higher education has probably heard of MIT. Just say that someone went to an Ivy League school and almost everyone will look at them with more respect.

The main reason so many have such respect for these schools, of course, is how tough it is to get into them:

  • Stanford: 5% acceptance rate. More than three-quarters of accepted freshmen had a high school GPA of at least 4.0.
  • Harvard: 5.6% acceptance rate.
  • Yale: 6.49% acceptance rate.
  • MIT: 8% acceptance rate.

Of course, these colleges have enormous price tags to go with those extremely low acceptance rates. MIT costs close to $44,000 per year. Yearly Ivy League tuitions range from about $43,500 to nearly $49,000. You’re therefore looking at starting costs of about $174,000 to get one of those big-name degrees.

Now, it’s just about unimaginable that an Ivy League student wouldn’t have a boatload of scholarships backing him or her up. Many top schools also extend special assistance to poor students.

But then again, you can easily end up paying an additional $56,000 in fees, room, and board.

  • A four-year Ivy League education can cost $230,000 or more—and the cost is climbing.

Tuition costs are rising by about 4% per year at Ivy League colleges. This snowballing price tag makes it more important than ever to ask if going to such a college is a worthwhile investment.

What You Get for a Big-Name Degree

Nobody can deny that a degree from an Ivy League college or similarly selective school has its advantages.

Perhaps the biggest appears when one tries to land a job right out of college. Bruni writes that recruiters for major Wall Street firms regularly approach students with offers of interviews. Considering that many college graduates need more than six months to find a job, that’s a huge leg up. Plenty of those grads would trade a leg for an interview from any company at all.

Another advantage Bruni cites is “that the graduates of more selective colleges could expect earnings 7 percent greater than graduates of less selective colleges, even if the graduates in that latter group had SAT scores and high school GPAs identical to those of their peers at more exclusive institutions.”

That 7% increase in income sounds great. However, tuition costs 483% more at one of the least expensive Ivy League schools than at a public college. Is that really going to pan out over time?

Bennett and Wilezol compared PayScale.com’s return-on-investment data for numerous colleges. The numbers weigh the 30-year returns on going to a specific college versus only having a high school diploma, factoring in such things as the cost of tuition and the losses of dropouts.

They found that the colleges that provide the highest return on investment are indeed, “Private, elite colleges.” Harvey Mudd, Caltech, MIT, Stanford, and Princeton were at the very top of the list. The University of Pennsylvania ranked 9th (this will be important later).

Over 30 years, the average graduate from one of the top 10 schools earned back anywhere from a bit under $1 million to nearly $1.5 million. That’s over $33,000 more per year, after paying full tuition, than they would have earned if they had just gone to work after high school.

I might be wrong, but it sounds like the very best schools offer better than a 7% improvement in income.

What If You Can’t Get Into an Elite School?

The most famous and exclusive colleges clearly do far more than pay for themselves.

That’s all great for the tiny number of students who can get in. But what about the students who get rejected simply because of the extreme exclusivity?

Stanford rejects 93% of the students with 4.0 GPAs who apply. It rejects 88% of students with perfect SAT scores in critical reading, 91% with perfect scores in math, and 86% in writing. It has to in order to maintain that 5% acceptance rate.

Think about that for a moment. You’re in a room with 100 kids who have the ambition to apply to Stanford. Ninety-three of them have gotten straight A’s for their entire high school career. Most of them have remarkable SAT scores to boot, and about 25 of them have gotten at least one perfect SAT score. You’re told to pick the five best.

No matter what you do, you’re sending a lot of the country’s brightest young people away. And odds are that you’re going to make a mistake now and again. The distinctions between such intelligent people are often too fine to see.

Bruni, citing the same study that determined that students of highly selective colleges make 7% more, found out what happens to those brilliant applicants who get turned away.

It turns out they do just as well as if they’d been accepted.

The study, performed by Alan Krueger and Stacy Dale, examined students who applied to the University of Pennsylvania. Remember, that’s an Ivy League school that offers the ninth-highest ROI of any American college. They found that for students with equal SAT scores, those who were accepted wound up making no more money than those who were rejected and went to Penn State.

highest ROI of any American college. They found that for students with equal SAT scores, those who were accepted wound up making no more money than those who were rejected and went to Penn State.

They applied this to other students and colleges. It turned out that it was easier to predict how much students would earn based on data about the schools that rejected them than about the ones they graduated from.

However, there was an exception to this overall rule. Minorities and other disadvantaged students wound up making less if they didn’t make it into big-name schools.

Krueger and Dale attributed this to networking. They believed that more privileged students had plenty of connections before going to college, whereas disadvantaged students needed to go to an exclusive school to make equivalent connections with the rich and powerful.

It appears that how much you’ll make isn’t so much about where you go. It’s about how smart you are, how driven you are, and how much time, energy, and effort you’re willing to invest in your future. On the other hand, it’s also about the privileges you were born into.

  • For many, going to an exclusive college translates into making much more money. Yet brilliant, hardworking white people who didn’t grow up poor will make just as much money even if they get rejected.

Well, you know what they say: the rich get richer.

On the opposite end of the spectrum are colleges that, on average, cost their students far more than they’re worth. Going back to Bennett and Wilezol’s analysis of the PayScale rankings, approximately 200 colleges have negative ROI. Several of these are such bad investments that the average graduate ends up making less than those who simply went into the workforce after graduating from high school. And that’s on top of their student loan debts.

Most of the worst offenders were “unspectacular private colleges” that had annual tuitions of about $40,000 per year in 2011.

  • Going to a private college does not mean you’ll make more money than you would with a degree from a public college.
  • At some colleges, students not only lose money on their tuition on average, but make less with a degree than they would have if they had skipped college entirely.

I won’t throw any stones; some colleges will improve over the years, and some will worsen. However, I would recommend checking PayScale before settling on a college.

The most ambitious part of Bennett and Wilezol’s analysis was their investigation of affordable, non-specialty, non–household name colleges in search of the best deals on a bachelor’s degree. In their words, “The result [was] almost entirely a few dozen public, mostly large universities with in-state tuition.”These generally offered returns three to six times greater than the investment of paying full price for four years.

Bruni’s research also found that getting an education at a large university—one with at least 10,000 undergrad students—has advantages over attending a smaller one. Graduates from these schools are more likely to be “engaged at work”  and therefore happier with their careers.

  • Going to an affordable in-state university with a large student population often pays off in income and career satisfaction.

Don’t feel like you’re settling for second best if you choose one of these state universities. Remember that if you were rejected by a more exclusive college, you have good odds of making as much money with a degree from a public school as you would have with one from your first choice.

You might think that employers place a high value on the name of the college you came from. That’s not true in most cases. Only about 9% of business leaders consider which college a job applicant attended to be “very important.”[1] The most important consideration is how much you know about the field you are trying to get a job in. You can get that knowledge at any college that teaches effectively—assuming, of course, that you choose a relevant major.

How Much Do Grades Matter?

While many students are hard workers devoted to getting the most out of their college education, at least as many seem determined to get the highest possible number of hangovers. You might expect that the latter group would get kicked out or fail quickly. Ask anyone who’s lived in a dorm recently, though, and they will cure you of that delusion. They’ll tell you that the people who spend every spare moment partying instead of studying will be there for all four years, apparently without ever going to sleep.

Some students care about their grades and others couldn’t care less. But who gets the last laugh? Do hard workers get better jobs faster, or can slackers expect employers to ignore their transcripts entirely?

Forbes writer Susan Adams says that in a survey of 200 major employers, 67% said they “screened candidates by their GPA.” She also explains that most employers look for a GPA of over 3.0. More than a few require a 3.5 or higher.

If your transcript shows subpar grades, you might be forgiven if you have a good reason. Employers are humans too and they understand that it can be hard to graduate magna cum laude when you’re juggling two jobs to pay tuition. In fact, demonstrating the ability to manage both college and work at the same time is often better than having a high GPA.

Pew reports that 38% of graduates surveyed said they’d have been “better prepared” for their desired job if they’d studied harder. That shows the power of a good GPA. But a whopping 50% said they should have gained “more work experience while still in school.”

So, high grades are important, working while you’re still in college is more important, and having a combination of both should really trim down that six-month job search time.

  • Your GPA does matter, but employers often see the ability to balance college and a job as more important.

But students should also be aware that grades, like money, devalue over time.

A 2012 study determined that “A has become the most common grade on American college campuses.” This is particularly bad at selective private schools. The grade inflation problem means that a GPA is becoming less of an indicator of intelligence and work ethic, and employers are starting to catch on.

If this continues, GPAs may become irrelevant—nothing more than a garnish for résumés. This needs to stop so that students who really are hard workers can prove it. Otherwise, why would anyone do anything other than party through college?

We still haven’t reached the point where grades are meaningless, though. If you go to college, study hard—and don’t forget to work a part-time job if you can handle one.

How Do Regional Differences Come into Play?

Where you go matters, and not just in terms of which college you choose.

Perhaps the biggest difference is in terms of tuition. The cost of attending a state college varies widely from one state to another, and can have a considerable impact on the return on your investment.

For the 2014–2015 school year, the average in-state Wyoming student had to pay $4,650 in tuition. That was the cheapest public college education available in America. However, it was still significantly more than the $3,500 average back in 1990.

Students in other states had it much worse. If you went to a public college in New Hampshire for the same year, you would’ve had to pay about $14,700.

  • The state you live in can make a $10,000 difference in the cost of attending a public college.

After Wyoming, the next cheapest states were Alaska, Utah, and New Mexico, which all cost between $6,100 and $6,200 that year. New Hampshire was followed by other Northeastern states: Vermont, Pennsylvania, and New Jersey, all $13,000 or higher.

If one state college were as good as another, then it would be wise to move to a state with cheap tuition before going off to college. But that’s not the case. Remember that many colleges don’t deliver high ROI; do some research before moving to Wyoming.

Tuition is not the only regional factor, either. Perceptions of a state college education can change from place to place.

In some areas, a public education may be considered a kind of failure. Certain people view it as the consolation prize for those unable to make the cut at a brand-name private college. But in other places, it’s something to boast about.

Bruni interviewed Nikki Haley, the governor of South Carolina and a graduate of Clemson University, one of the state’s public schools. She said, “ ‘Clemson . . . immediately takes away barriers, immediately allows transactions to take place that wouldn’t normally happen. If you come to South Carolina and you went to a school out of state, you lose that entire network. And it’s a huge resume booster if you’re running for office to say that you’re from one of the state’s schools.’ ”

That particular instance might seem counterintuitive to some—the American South is not known for its high standards of education and living, and that reputation isn’t entirely undeserved. Census data shows that both education levels and earnings are much lower in large portions of the South than in other parts of the US. In Mississippi, Arkansas, Kentucky, Alabama, and Tennessee, the percentage of the population with bachelor’s degrees ranges from 18.9% in Arkansas to 23% in Tennessee. Median household incomes go from as little as $36,646 (Mississippi) to $41,725 (Tennessee). In Massachusetts and Connecticut, 38.2% and 35.6% have bachelor’s degrees, respectively. The median household incomes are $64,081 and $67,034.

So should students avoid an education in the South?Not necessarily. One factor is the grade inflation we discussed in the previous section. The same study that covered the inflation problem found that Southern colleges actually grade much more strictly than those in other regions. That means they have a few unique pros and cons. For pros:

  • Employers who know about grade inflation will be more impressed by a high GPA from a Southern college.
  • If you’re an excellent student, then attending a Southern college will give you a better chance of distinguishing yourself from your classmates.

For cons:

  • If you graduate with anything less than a 4.0, employers who don’t know about this difference may think you were a worse student than you really were.
  • Those who struggle with their studies may want to attend college outside the region, where they will likely graduate with a higher GPA that’s more appealing to employers.

Since it’s easier to get Fs at, and therefore fail out of, a Southern college, graduating from one could be considered more impressive than graduating from a school in another part of the country.

It’s clearly dangerous to judge by reputation. Just as private colleges are not always better than public ones, those from poorer and less educated areas might actually hold their students to higher standards. One must erase one’s biases and review the facts to make a good decision—and that doesn’t just apply to choosing a college.

Are Things Different for Men and Women?

We’ve already discussed that for minorities and the disadvantaged, going to a big-name school makes a big difference. It gives them a chance to make badly needed connections with the wealthy and powerful. But what kind of difference does college make for women?

It’s no secret that women are at a disadvantage in the workplace. The US government says that women only make 78% of what men do.The Pew Research Center argues that it isn’t so bad today—their research indicates that women make 84% overall, and young women make 93%. That still adds up to a significant pay gap, though.

Will getting a college education help women close the gap? Or is it a waste of time for them if they’re going to earn less money anyway?

The answer is clearly the former. As the College Board writes: “In 1972, median earnings for males with bachelor’s degrees or higher were 22 percent greater than median earnings for male high school graduates. The earnings premium for female college graduates was over 40 percent. In 2003, the typical male college graduate earned 60 percent more than the typical male high school graduate, while the premium for females was 69 percent.”

While all college graduates have been making more and more money than high school graduates over time, the difference has been widening even faster for women. A woman with only a high school diploma could expect to make about $25,000 a year in 2003. With an associate’s degree or partial college education, she was still unlikely to make the $30,000 mark. That left her at a lower income than a man with a high school diploma. Give her a bachelor’s degree or better, though, and she would probably make over $40,000.

The numbers can be heartbreaking to look at, but the facts are plain. Women need college far more than men do. It is not fair, and it is not right, but it is the truth.

What Are the Salaries of Popular Jobs Available to Those with a Bachelor’s?

The College Board lists the following jobs as having the most openings for graduates with bachelor’s degrees.In order to keep the median salary data accurate, though, I have tweaked their list a little. They used two different entries for computer software engineers (one for applications and one for systems software) and excluded special and/or vocational education jobs from the teaching positions. I have eliminated those distinctions and rounded salaries to the nearest $250.

Here are the median salaries for the most popular jobs, in order of how many job openings are expected:

  • Elementary school teachers: $41,500.
  • Accountants and auditors: $47,250 and $52,500.
  • Secondary school teachers: $43,500.
  • Computer software engineers: $78,750.
  • Middle school teachers: $43,250. 
  • Computer systems analysts: $66,250.
  • Network systems and data communications analysts: $59,750.
  • Construction managers: $73,500.
  • Market research analysts: $49,500.

Remember that those figures aren’t starting salaries. You will have to work your way up to that rate of pay, but you can expect to earn it after you’ve gained field experience.

Is There Anyone Who Doesn’t Really Need College?

Josh Marchant, a King Arthur Flour employee, has done reasonably well for himself without a college degree. “I haven’t really made all that much money, I don’t have that much in savings,” he admitted. Yet he has a life many college graduates would be envious of. He and his wife were able to afford an apartment while she pursued an associate’s degree in nursing. Today, still in their mid-20s and with a minimum of college debt weighing them down, they are homeowners raising their first child.

“I had planned on going to college,” he said. “I don’t think I will at this point.” He also stated that he “did three months at the College of Charleston and decided it wasn’t worth my time and money” shortly after high school. His decision to leave early saved him from getting deep in debt.

When asked if he thought leaving college was the right decision, he said “I think so. It’s worked out fine so far.”

He also added that his lack of a college degree isn’t holding him back from getting promoted or finding a job he’s happy in. “I love my job. I absolutely do. It’s super menial . . . boring . . . but all the people are great. Everybody’s willing to do everything. They don’t pay [badly] for what you’re doing.” He admits that “my ceiling of improvement would be a lot higher if I had, say, a business degree. [But at King Arthur Flour,] even without one there’s a lot of room to go up.”

His advice to others? “Don’t worry about the job, find a good company!”

We’ve seen that college has a lot of disadvantages. Tuition is absurdly expensive compared to what it used to be. Hundreds of colleges, and perhaps a few degrees, offer negative ROI. And finally, if you lack the perseverance to make it through college, you may be better off avoiding it. 44% of Americans who go to college for a bachelor’s program either drop out or otherwise fail to graduate after six years. That’s a large number of people with a lot of debt and very little to show for it.

However, the disadvantages for those who decide to avoid college make it seem like no choice at all. The median income for high school graduates aged 25 to 32 is noticeably lower now than it was for previous generations. Their unemployment rate is more than 12%, compared to 3.8% for college graduates in the same age bracket.

It seems like a college degree is more necessary than ever. Beyond working at King Arthur Flour, are there any decent careers left for those who only have a high school diploma?

The answer is yes. Following is a list of some of the highest-paying jobs for high school graduates, along with their median incomes (again rounded to the nearest $250), as reported by Forbes :

  • Administrative services managers: $79,500.
  • Construction and extraction supervisors: $59,250.
  • Wholesale and manufacturing sales representatives: $53,500.
  • Electricians: $49,250.
  • Plumbers, pipefitters, and steamfitters: $47,750.

Of course, these are skilled jobs. Many require years of experience and extensive knowledge about the field. However, if you have access to a family member in the same business, a mentor, or on-the-job training, you can learn everything you need to for free—and earn just as much as a college graduate.

You will likely have to work harder and have a greater willingness to learn than you would to succeed at college. But if you have the ambition and work ethic to pull it off, skipping college might save you a lot of time and money.

There is one other thing to consider, though: advancement. A construction supervisor can make $59,250 a year with just a high school diploma. But put a college degree in the same person’s hand and they might become a construction manager, making over $14,000 a year more.

Whether you need college for these careers depends on one question: how far does your ambition call you?

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