ROI: Higher Education

The other day, I came across an article in the NYTimes that discussed the new reality of college students graduating in this day and age.  This topic is quite familiar to me and as some of you may know…I’ve contemplated the notion of going on to law school.  However, after being accepted into a few of the places that I had my heart set on…a very callous reality set in.  How in god’s name am I going to pay for it?  We are talking $35,000 per year in tuition…not including cost of living.  I can already hear the next question being asked…well how does one usually find the means to fund such an endeavor?  Well if you are lucky, you will get some hefty scholarships.  No, I was not one of the lucky ones.  The alternative option is to sell your soul to Sallie Mae. This article focuses on that second option…although from an undergraduate context.

To summarize the article, the author is essentially weighing the cost/benefit of attending a four year university.  The focus is specifically on private universities, where tuition can range anywhere from $20,000-$50,000 a year…yes you read that correctly…for your UNDERGRAD degree.  The idea behind going to a private school is often that such degrees lead to prestigious job opportunities and high salaries fresh out of school.  However, what many students don’t always consider are the limitations they may face when those loans first kick in.  Having been out in the workforce for a while, it is painfully obvious to me that my former freedom and mobility are now suffocated by a monthly payment to Uncle Sam.  If I want to pick up and go backpacking through Europe tomorrow…this payment may be the one thing to put the kibosh on that.  Even scarier, my job prospects are limited to positions that will pay the bills.  In other words, if you went to college and dreamed of being an investigative journalist but the only gigs available pay just about minimum wage…you have to consider how you will get by without obtaining secondary employment.  Ergo, your dreams may have to be put on hold. 

So where is the solution?  We instruct high school seniors to forget about college and just try their hand out in the workforce for a little while?  Peter Thiel, cofounder of PayPal seems to think so.  He is conducting his own “experiment” by giving $100K to bright and motivated students to fund their own startup company.  His premise is that either way they’ll be taking out the $100K…however, with his charge at least they’ll make a return on their investment.

Or maybe students will suddenly become aware of the harsh reality facing them when repayment begins and feasible employment never does. However, and as many other articles have already speculated, it won't stop them from going. What needs to happen is intervention and revolution. For example, the current scam blog movement pioneered by disgruntled attorneys who now, having graduated from a Tier 4 (or really anything outside of T10) school are taking paralegal jobs for $30K/yr and have a $1500 loan payment to make. All education is not created equally. Yet, it'll cost you just a little more to graduate from Harvard Law as it will Thomas Cooley (not even sure they are ABA approved) and you'll be lucky if you can get a gig as a document review associate.  Now comes the real travesty…these loans are not eligible for discharge in bankruptcy.  How is it that you can discharge a malicious tort judgment, copious amounts of credit card debt, oh and my favorite…gambling debt, but you cannot be forgiven for debt accumulated by years of seemingly hard work and dedication? 

Back to the solution…really, until the education system is reformed and the government stops handing our hard earned taxpayer dollars over to some of these diploma mills, this proverbial bubble will just continue to grow. In the meantime, I will say that I have no regrets over my education.  It has opened a lot of doors for me and continues to do so.  However, the cautionary tale remains that education, especially post-graduate education does not always guarantee you a cushy house in the ‘burbs...at least not by today's standards.