College Degrees: What's Their Real Value?

What is the value of a college degree? For most people, the answer to this question seems self-evident. Aside from its intrinsic value, numerous reports have confirmed that an individual's job opportunities and earning potential increase significantly with a college degree. And yet, there seems to be a small but vociferous faction that claims otherwise. Take this article, for instance - "Wise Up! Skip College. Buy a Franchise" - by Franchisepick. The author writes:

Recent H.S. Graduates, you are at a crossroads. One path leads to the instant gratification of 4-5 years of partying and debauchery at Mediocre U., then a meaningless diploma, a mountain of debt, and an eventual minimum wage position cleaning the grease traps at the local Bun 'N Run. The other path? Skip college, invest the same amount of money in a Bun 'N Run franchise opportunity, and, in four years, be partying in high style aboard your yacht while MBA candidates clean your grease traps and deposit your daily haul.

While written tongue-in-cheek, this article does reveal a genuine suspicion among many people that a college degree just isn't all it's cracked up to be. I've read a number of these articles, and most, if not all, tend to discount college degrees for one or both of the following reasons: (1) college degrees are too expensive; and (2) success can be had without a college degree. I'd like to address each of these reasons and see if they hold water.

First, let's address the cost of a college degree. The College Board reported last year that the average cost of college, including room and board, was about 13,000 at public schools and 30,000 at private schools. That amounts to about $50,000 and $120,000 for a four-year degree, respectively. Given that most students attend school full-time, one might also add to those figures the cost of lost wages, which could easily be another $100,000, thus bringing to the "true cost" of a college degree to somewhere between $150,000 and $230,000 dollars.

That's quite a hole. Still, even with that debt, studies have shown time and time again the long-term financial benefits of a college degree. For instance, the United States Census Bureau reported in 2004 that an individual with a bachelor's degree makes about $30,000 more annually than someone with only a high school diploma. Over the course of a working lifetime, that's more than million dollars. Thus, any initial savings made possible by skipping college are greatly outweighed by the long-term consequences, which are severe.

That brings us to the second reason. Can't you succeed without a college degree? What about all the people that have made millions without going to college? Good question. It's true there have been dozens of noteworthy people who never attended college or who never finished. The list includes such luminaries as Albert Einstein, Thomas Edison, Henry Ford, the Wright Brothers, Steve Jobs, and Bill Gates. Well, what of them? First of all, the fact that they are notable - meaning rare - tells you how often it happens.

Basically, it's a case study between possible and probable. It's like the casino telling you to play roulette all day instead of working for a living. Sure, you can strike it big and live out the rest of your days in luxury - that's possible. But statistics show that it's far more probable that you'll lose everything and end up "smoking doobies in a van down by the river." So, unless you think you're then next Albert Einstein or Bill Gates, a better bet would be to play the percentages and go to college. After all, there's a reason why no one publishes a list of millionaires and other notables who actually finished their college degree. Those people are the rule, not the exception.

Thus, any pundits who claim, sarcastically or not, that a college just isn't worth the trouble or the money, are in error. Yes, college degrees are expensive, but they are also investments with the potential for a big payoff. (Granted, as with any investment, that payoff isn't assured, but the likelihood of success is far greater.) It's true that some people have succeeded without a college degree, but those people belong to a very small minority. Don't let anyone fool you: significant monetary success without some kind of education is hardly a well-worn track. That's why it's newsworthy when it does happen.

In the final analysis, it seems the grounds for discounting the worth of a college degree are based either on poor math or logical fallacies - two errors, ironically, that a college education is supposed to correct.

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