My friends and I love to complain about medical school. The hours, the workload, the lack of sleep, and of course all of the time it takes from our precious lives. I have written about how I believe medical school doesn’t make sense to attend from a monetary standpoint or from a quality-of-life standpoint. There really is no reason for someone to go into medicine unless they just absolutely love education or helping people. It is really hard to argue against this fact, but what about attending college?
There is no doubt that going off to college is one of the best ways to spend 3-5 years of your life. You make lifelong friends, party harder than you ever have before, and have countless adventures, but does it make sense from a monetary perspective? College never gets cheaper as the years go on. It can cost anywhere from $100,000 to $200,000 to attend college over 4 years depending on where you go and how lavish you live. People attend college and obtain a degree in order to increase their earnings over a lifetime.
Georgetown University has done a great study looking at a lot of data on how much money different majors earn. The list of the top 10 majors with the highest median earnings is heavily dominated by Engineering degrees. Computer Science and Pharmacy related majors also make the list. If you are attending college to earn one of these degrees, then yes, college is a great investment. It is money well spent. You are almost guaranteed a higher earning job than you otherwise would have had in life had you not gone to college. You will be able to pay off your student loans and live with a high standard of living.
On the other hand, the list of the top 10 majors with the lowest median earnings includes degrees such as religion, counseling, and childhood education which don’t pay so well. In fact, there is no guarantee that the job you obtain with these degrees will be higher than a job you may have obtained without a college degree. With a degree such as Counseling Psychology you will have lost 4 years of earnings and have a mountain of debt to pay off as compared to if you had just skipped college and gotten a job out of high school. The only reason to major in any of these degrees is if you absolutely love that field, and you cannot imagine your life without a career in that field. If that is the case, then by all means pursue your dream. However, if you choose to pay for a degree that doesn’t increase your earnings, then please do not complain about how you can’t pay off your debt or can’t find a job, etc… You chose to get that degree, and college is no longer a guarantee of higher earnings.
I suppose that is my point…college is no longer a guarantee of higher earnings. Society’s current dogma of life is to finish high school, go to college, get a job, and then retire eventually. For many people though, college is becoming an unnecessary step in that line of thinking. One of these reasons is that degrees have become a commodity in large part. You pay the time and money, and you are given a degree. Employers don’t have a hard time finding applicants with college degrees, so a degree no longer separates you from the applicant field like it once used to. Another huge factor is that the cost of obtaining a degree by attending college has skyrocketed. Because “everyone” has a degree and the cost of a degree is increasing, the value is decreasing while the cost is increasing for a degree.
Where is the majority of the value in a degree? You don’t learn too many practical skills in college, so why do employers love seeing that you have a degree? Many people would say signaling theory is at work here. Signaling theory states that the degree is being used as a signal for your accomplishments and work ethic. Employers recognize your hard work, and the degree automatically legitimizes your qualifications for a job. Signaling theory is a real thing, and it is a very important way to get your foot in the door.
I will use myself as an example. I have a degree in Biology with a focus in Neurobiology from UT Austin. All of the economic and business knowledge I possess came strictly from self-teaching and experience. That part of my education is very informal, yet it is just as effective if not more effective as being taught in a University setting. I can guarantee you I have at least a hundred-fold more experience in investing, running a business, and general finances than any freshly minted business or finance major. However, the new graduate business major has one major advantage. He or she has a degree in Business whereas I do not. Any prospective employer may immediately write me off and not offer me an interview whereas the new graduate would be a top prospect for hire. The college degree offers a well-deserved advantage in the job market in a scenario such as this one and that is where a lot of the value of having a degree is found. It gets that first foot in the door for you to jumpstart your career.
There is no doubt that obtaining a college degree is one of the most fun things some people will do in life, but more and more there is cause for hesitation to obtain one from a monetary standpoint. If you have an innate talent or knack for running your own business, then you may want to think twice before forking over the cash for a degree. Is it worth it? If you know for a fact that you want to obtain a degree in a low paying major, then give some thought about how you will pay for it, and if the money will outweigh the utility of being in a field you love and enjoy. These decisions will only get harder for today’s youth to make as college tuition continues to climb and outpace inflation. The view of automatically going to college regardless of the degree you intend to pursue is already an outdated perspective in our society, but not everyone knows it yet.
Money and Medicine for Millenials 