The

Business of Higher Education

Doug Casey on Why College Is a Waste of Money

Justin: Doug, I recently had an interesting conversation with my sister.She told me that her financial advisor suggested she start setting aside $500 to $1,000 a month to pay for her son’s college education. That’s because a four-year college education is apparently going to cost between $400,000 and $500,000 18 years from now. 

Her advisor clearly arrived at this figure based on how fast college tuition costs have been rising, which is about 6% per year based on my research. 

But you have to wonder if the cost can keep rising at this rate. It seems to me that no one will go to college if it’s going to cost a half-million bucks.What do you make of this trend? 

Doug: Well, the first thing—my advice to your sister is to get a new financial advisor. I fear that she’s relying on a complete imbecile. She should fire him immediately, and for a number of reasons. 

Number one is his assumption that the trend of higher college costs is going to continue to a totally unaffordable level. 

In fact, the cost/benefit ratio of going to college is already so out of whack that the whole system has to change radically. 

A college degree, even now, is of only marginal value; most everybody has one. And things that everybody has are devalued. You’re quite correct that colleges and universities today are dead ducks as businesses. Unless you’re going to learn a trade, like doctoring or lawyering, or you’re going for science, engineering, or math, where you need the formal discipline and where you need lab courses, it’s a total misallocation, even a waste of money to go to college today.

 DYI:
I wouldn’t go to the point of a complete waste of time; however there is no doubt that the loudness of the bang for your educational dollar has diminished to a whisper.  If you are going to pursue a degree do it as cheaply as possible.

• Avail yourself to the College Level Examination Program – CLEP – study hard and pass as many as possible the cost is a fraction spent in a college setting.

• Go to a community college that is aligned with the four year state school (far cheaper than private on average) you wish to graduate from dropping your cost further.

• On line accredited courses as well plus paying cash whenever possible to stay away from the debt servitude of student loans.

• Stay at home with Mom and Dad.  Room and board as a hotel guest of University Whatever chews up precious dollars.  Unless your parents are well off and paying the bills it is NOT worth the costs.   

• Sign up for any and all grants or possible scholarships…Yep beg for as much free money as possible.  Going to school is no longer having those fond warmhearted memories; it is a business; all businessmen and women will tell you the key to success is cost control.

College Prices Hit New Record Highs in 2016

The total published or “sticker” price for attending an in-state public university averaged $24,610 a year in the fall of 2016, the College Board said today in its definitive annual report. That cost, which includes tuition, fees, room, board, books, travel, and miscellaneous costs, is up $527, or more than 2%, from last year.

Half of those costs is room and board…Your average cost is around is around $12,000 per year or $48,000 total; a cost that is NOT worth the effort.  CLEP, community college, stay at home, beg for grants and scholarships and shop for a lesser cost school you want your degree to be under $10,000 all in AND with little or no debt.  Remember colleges or universities are nothing more than businesses so treat them as you would any enterprise.  Sorry to report that is how the F’ing world works.

DYI