College is expensive. Yes, gas, food, and life in general are expensive, but college costs have risen much faster than average inflation for decades. As you can see, college tuition has increased at a much higher rate than even medical care.
For many schools, the way to handle this inflation is by freezing tuition. That was the case here at the University of Minnesota. A two-year freeze was part of a deal struck between Gov. Mark Dayton and state lawmakers in 2013 when they agreed to boost state funding for the university by $42 million. President Eric Kaler has worked to extend the tuition freeze multiple times. The problem with these tuition freezes is that colleges do not always cut expenses, and then taxpayers get stuck paying the bill. President Kaler, however, is planning to reduce administrative spending by $90 million by 2020, following widespread criticism of the institution’s exorbitant pay to top executives.
The average Class of 2014 graduate with student-loan debt must pay back $33,000, and the class of 2015 is expected to have to pay back even more. At what point will a college degree no longer be worth the cost? Is it even about education anymore or just the final stage of a competitive tournament? From grades and test results through the U.S. News & World Report rankings of the colleges themselves, higher education sorts us all into a hierarchy. One argument for college degrees is the difference in earning power over a lifetime. Some studies have estimated a gap of more than $500,000, on average, between people who get a four-year degree and those who do not. These studies do not factor in forgone income, the money someone would be making if he had not gone to college. By making $8 per hour, working 40 hours week for 52 weeks, one could make $33,280. Investing this money at a rate of five percent return for 40 years would yield nearly $470,000. Adding in the savings of $50,000 for not going to college would more than make up for the $500,000 difference in earning power.
In 2012 Peter Thiel, cofounder of PayPal and the first outside investor in Facebook, offered an alternative to college. He paid a couple dozen of the nation’s most promising students $100,000 to walk away from college and pursue their passions.
In an interview with 60 Minutes, Thiele said, “We have a bubble in education, like we had a bubble in housing in the last decade. Everybody believed you had to have a house. They’d pay whatever it took. Today, everybody believes that we need to go to college, and people will pay whatever it takes.”
It is important to note that Thiele is not telling people not to go to college; he himself went to Stanford for his bachelors and as well as for his Law degree. Thiele believes, “that people should think hard about why they’re going to college. If your life plan is to be a professor or to be a doctor or some other career where you need a specific credential, you should and probably have to go to college. If your plan is to do something very different, you should think really hard about it.”
Today, getting a college degree does not guarantee a job right after graduation. If, in fact, you do get a job, it may not be one that requires a college degree. In 2013, more than a third of recent college grads with jobs were working in positions that did not require a degree. Among people pursuing a law degree, only 84.5 percent will find jobs at firms. Do not forget to factor in the fact that the average student debt for private law school hovers somewhere around $125,000. Maybe Americans should reconsider outsourcing their future to a big institution. Tech schools are becoming successful, and many companies are looking there for potential hires.
President Obama believes, “a high school diploma is not going to be enough. Folks need a college degree.” Is college the only place to obtain a higher education? Is it really for everyone? Peter Thiele disagrees with the Presidents view. Mark Twain, a man known to speak his mind said, “I have never let my schooling interfere with my education.” To whom will you entrust your education?