Is College worth the Return on Investment?
For those of you contemplating college as the next step in your life, it will be one of the most important decisions you will make as a young adult. In this article, I am going to explore the positives and negatives of choosing to attend college, and share my experience of electing to send my kids to university. Most of us make this decision based on emotions, how we feel, instead of focusing on the return on investment (ROI) from attending school.
Let’s start out with some cold hard facts about the college industry. Currently, there is over $1.7 Trillion in student debt. 45,000,000 Americans have student debt (around 1 in 7), and 40% of student debt holders don’t have a degree. To me, college has become a huge business where government has inserted itself, and created a massive problem by offering young adults the ability to defer paying for college by creating these student loan programs. Every time the government inserts itself into an industry, cost skyrocket and the quality of the product drops.
With all that being said, I would like to share with you why I chose to send my kids to school. I am a father of six homeschooled children, and I recently had my oldest daughter graduate and pursue her dream of becoming a Catholic missionary. My second child is currently a junior at Flagler University, and has switched his major from finance to accounting. He does not see himself working in corporate finance, and would be better served understanding budgets and financial statements because his interests have changed to investing in real estate. 
So why did I think it was a good idea for my children to attend? The most important reason was that I wanted my children to be immersed in the classroom, meet new friends, and be challenged by professors. I wanted them to find and create life long friendships, while learning to abide by timelines and, at times, perform tasks that they found to be difficult, and in their words “useless”. I also knew that my children were grounded young adults, strong in their faith, and not easily persuaded to follow the mob.
One of the qualities that we don’t teach our kids is that in life those that are successful understand that we have to often do things that we don’t want to do, or know why we have to do them. Why do I have to do this project for my boss? Why do I have to work on the weekends? In school, my kids had to take some classes that they thought were useless, and they had to get up early in the morning to get to class. They had to study late into the night for midterms and finals. These are all actions that are building the habit of doing things that we don’t want to do.
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A few weeks ago, my son was studying for his midterms. He was sick, and I asked him why he wasn’t taking a break, or asking the professor if he could take the exam at a later date. His response was that it was his responsibility to study, no matter how he felt. It was one of my proudest moments as a dad because he understood that college was expensive, and that made a commitment to get the highest grade he could. College was turning him into a responsible young adult.
Another reason I decided to send my kids to school was that they are living at home, and I am able to pay the tuition without incurring any student debt. It would be a totally different outcome if I had my children incurring massive debt to attend school. When they graduate, they will have a degree and zero student debt.
My children also have the option of dual enrollment, where they have the ability to attend junior college while still in high school. My son accumulated enough credits in high school for a full semester at Flagler. And the cost of attending junior college was zero when he was in high school. In fact, many home school families have their children attend college when they are juniors in high school. When they graduate high school, many of them also graduate with an Associate’s Degree in college. They just cut their college cost in half, and can go out and get a job two years sooner than their friends.
Here are a few reasons why I was hesitant to allow them to attend. I believe colleges have become an indoctrination center for our youth, and instead of promoting free speech and thought, they stifle it. I do agree with my kids that some of the classes are a complete waste of time. The lifestyle on college campuses is also unappealing. Who thought it was a good idea to send an eighteen-year-old away to a school, with unfettered access to alcohol and partying?
The cost of many colleges has become obscene, and the return on the tuition is laughable. When I attended Fairfield University back in the 90s, the cost for a four-year degree was around $80,000 for tuition and room and board. The cost today is over $70,000 per YEAR.
Mom & dad have to earn, on average, over $350,000 to send their kid to Fairfield. Let’s hope the kid graduates within four years, or else that number goes up. And if the kid doesn’t graduate, as in the 40% figure above, you’ve flushed a ton of money down the toilet. The average starting salary for a college graduate is around $50,000. Spending $350,000 to make $50,000, and losing four years of potentially earning money, doesn’t make sense to me, especially if you have to incur student debt.
Let me end on some positive news. There is definitely a segment of the population who should absolutely attend college. If your kid knows he or she wants to be a doctor, lawyer, engineer, or other profession, then they will have to go to school. If they are gifted in school, and receive scholarships, then they should definitely consider college. If they can find a way to attend school without burdening themselves with debt, then they should consider college as their next step in life.
As parents, we feel the pressure of society and the constant tug of having to conform to it. I’m here to tell you that you need to make these life altering decisions based on what’s best for you and your family. Who cares what Money magazine, or Joe down the street thinks? What matters most is how is this decision going to impact you financially and what is your return on investment. If college isn’t right for your family, there are so many other options that you or your child can pursue.
I’d love to hear what made you decide to send your kids to school. Please leave us a comment down below.
– Gino Barbaro
Jake & Gino Personal Finance Academy Welcome to the Jake & Gino’s Personal Finance Academy, where we teach financial education, life skills and personal development that will propel you success. It’s time to teach the skills that are not being taught in school: Money and Financial Intelligence.
