“The debt is just short term”, “it’s the only way to get the job you want”, “you’ll never make any money without a degree” are common college myths. Let’s discuss the most important: whether a college degree is worth going into debt over, and what the alternatives to college debt are.

College Is Expensive

Education costs are spiraling out of control. A recent report by CNN’s Money Magazine even quotes the former U.S. Department of Education’s Commission on the Future of Higher Education as saying:

“If college costs continue to escalate at this rate, you may reach a point where the investment simply isn’t worth it.”

Have you reached the point where spending the money simply isn’t worth it? How do you know when you’ve reached that point?

It doesn’t take a PhD (pardon the irony) to acknowledge the incredibly increasing costs of a college degree. Money Magazine reports that the college costs are increasing four times the rate of inflation.

Private institutions charge an average of over $20,000 per year for tuition alone, meaning lifestyle costs aren’t factored in yet. All in all, going to school can cost up to $50-100,000. In order to understand this number, let’s take a step back and analyze three factors.

College Debt Ruins Lives

These aren’t just scary numbers; behind every debt statistic are thousands ruined lives. Take Kristin Cole, for example, as reported by The Seattle Post-Intelligencer:

Kristin Cole, 30, who graduated from Michigan State University’s law school and lives in Grand Rapids, Mich., owes $150,000 in private and government-backed student loans. Her monthly payment of $660, which consumes a quarter of her take-home pay, is scheduled to jump to $800 in a year or so, confronting her with stark financial choices.

“I could never buy a house. I can’t travel. I can’t do anything,” she said. “I feel like a prisoner.”

The college myth proclaims that the debt is just short-lived. For many, this simply isn’t true. SmartMoney reports:

Vickie Hampton, an associate professor of financial planning at Texas Tech University, knows that being well educated can make you poor. A colleague of hers, she says, racked up more than $100,000 in debt while earning a Ph.D. in English. “There’s very little probability of her paying that off in her lifetime!” Hampton says.

Lifelong-debt is no laughing matter. College debt is destructive on two levels:

• Current funds. A portion of your paycheck will go to the debt, meaning a house, nice car and everyday luxuries simply might not be open to you for years.
• Future Funds. A dollar of debt is an anti-investment. Over the course of one’s life, investing $1 at 18 or so means having roughly $10 at retirement given 5-8% return. This means that spending $100,000 for college is actually spending $1,000,000 in terms of actual spending money later on. That’s without factoring in interest, meaning the actual figure is much higher.

But the college myth proclaims that it’s a necessary evil. Without that degree, you’ll be financially backward for the rest of your life, so goes the myth. This simply isn’t true as we discussed earlier in the article Most Don’t Need a College Degree.

So what are the alternatives to college debt? Is there a way of getting the degree without racking up the costs? Remember, debt is always a choice because there are always alternatives to debt.

Alternatives to College Debt

Debt is most certainly not the only option when it comes to paying for college. If anything, college debt should be the last option. I personally chose to go completely without debt — I’d choose no degree over substantial debt for a degree.

As far as the actual alternatives:

• State Schools — State schools average a little over $6,000 per year, with private institutions at over $20,000. Less prestigious? Probably not $50,000+ worth.
• Community College — Community colleges can be extraordinarily cheap because they serve in the function that a real college should: to give anyone and everyone an education. No elitism, just a cheap education. Don’t think that it’s so less prestigious that you can’t make it in the real world; some places, including Stanford, accept some community college students.
• Pay-As-You-Go — This seems to be a forgot method. Paying for a year, taking a year off, saving money and paying for another year. It might take a few extra years, but the end result is absolutely no debt. Oddly enough, this can actually be much, much cheaper than going into debt.
• Scholarships — There are literally tens-of-billions of dollars in scholarships. The VFW, Target, Wal Mart, Coke, almost every company and organization gives out scholarships. If you have a great writing ability, there’s almost no excuse for not making use of the scholarships. In the next article I’ll show how you can search for your own using online databases, so make sure to subscribe.
• Don’t Get a Degree — I’ll be one of the few who would actually suggest this: statistically, most of the readers of this article don’t need a degree to become successful. Most people don’t have a degree, and if you decide that entrepreneurship is for you that’s another reason to not worry about the expense. Instead of paying for your degree, you could save the 50k and put it towards starting your own debt-free business.

Significant debt isn’t necessary to get a degree. Using the methods above, one can completely skip the decades of having the debt on the back of one’s mind. Debt destroy’s lives and ironically destroy’s one’s ability to succeed, if the debt is large enough. Don’t go into debt for college unless absolutely necessary.

I’ll be writing more about rethinking popular college beliefs, including specific ways to find great scholarships regardless of your skills or portfolios. Make sure to subscribe below!

Related posts:

1. Most Don’t Need a College Degree
2. Rethinking College, a Series of Articles
3. Save Money or Make Money?

My reasoning was fairly simple, though the reaction I get from most people is something along the lines of: “What? You can’t be serious! A college education is the only way to make money! People without degrees fail!” Heeding this fear-mongering myth, many students my age are spending $50,000+ each on their degrees; some will spend more with graduate and post-graduate studies. But is it worth it?

College has become a kind of a rat-race; the value of a degree is often based on social perception rather than concrete education. The nicer the college one is accepted to, the better one looks, the more likely one is to get a job — at least, thus goes the general belief. This is actually not entirely true, as we’ll be discussing in a bit.

College Isn’t Necessary for Most

Of course, a degree is sometimes necessary. Doctors, lawyers, engineers; many occupations require a degree. But you don’t need a business degree to get into business. You don’t need a degree in web design to get into web design. You don’t need a degree in philosophy to flip burgers. Just kidding!

Degrees can certainly be helpful, but for most it’s simply not needed. Jobs that require degrees are a minority, not a majority of jobs.

Bottom line: chances are, you don’t need a degree. But, in some industries, most individuals have one. The only question is: did the workers in the industry really need the degrees or did the workers just end up with one? This of course, begs another question…

…What Are Employers Actually Looking For?

My father is a businessman, working years in sales and management. He worked his way from the bottom to the top, mastering every step of the journey until finally owning his own business, an oldies radio station in a resort community nestled in the Ozark Mountains.

While I worked in his office I had the opportunity to talk with several millionaires and a great many other successful businessmen. Small talk, when involving at least one teen, almost always gravitates toward the topic of college plans so it was no surprise when the topic came up with these individuals as well.

Surprisingly, nearly all of the successful people smirked at the idea that a college education is necessary to succeed in business. “Nobody,” they said, “cares if you went to Harvard. Your boss just wants to know: do you know how to do your job? If so, you’ll do fine. Period.” It’s no wonder that they had their position, as some had degrees in business, and couldn’t point to a single place where the degree was helpful.

As the old adage goes, “Good help is hard to find.” It’s true. In some regions, over-employment is wrecking havoc on businesses; there aren’t enough workers to go around. Any young individual who knows how to get the job will not be looking for a job.

This isn’t to say that unemployment isn’t also a problem. Any business owner or manager can tell you that it’s easy to have plenty of applications but few individuals with what it takes to get the job done up to standard. We may or may not have an unemployment problem, but there’s always going to be a shortage of great workers who desire excellence and apply themselves in everything they do.

Of course, having a degree can certainly help you even get the interview when applying for a job. More on that below.

Why Degrees Help Your Salary

There’s an incredibly strong correlation between having a degree and having a high paying job. Note: that’s a correlation. This doesn’t mean that the only reason those with a degree are getting paid more is actually the degree.

After all, who’s more likely to go to college and graduate with the degree, a self-starter or someone with little work ethic? The correlation is largely caused because self-starters are already more likely to attend college in the first place and would have been likely to succeed anyway.

Along those same lines, in order to understand exactly how a college education will help you earn more, we need to see when and how that happens. We know the degree probably isn’t going to magically give you a higher wage. We know the degree isn’t going to mean that you will master your profession; a degree won’t do the work for you.

The degree can increase your lifetime earnings by:

• Giving You an Interview – By opening up jobs that you wouldn’t have had the resume to otherwise even send in an application. Basically, a 4-year, $50,000-150,000 resume stuffer.
• Giving You “Experience” – By giving you knowledge of the field, you’re more likely to start with higher wages than someone without a degree. Basically, it gives you a head start. But is it a four-year head-start? That’s a gamble.
• Giving you the Access to the Field – Of course, there are some fields that one simply needs the degree to enter, period. Law and medicine are two classic examples.

It can’t be denied that college can be helpful and is often vital to getting a job in a highly competitive field. But looking at the actual root of this helpfulness can bring us to much cheaper and less risky alternative.

Like what?

Several months ago I read the story of a budding businessman who wanted a job with a high-class firm that was simply out of his reach. But he got in. How did he do it? The same way you can: Offer to “intern”, free of charge, for a month. That’s an almost guaranteed way to land any job. It’s a way of getting past the “must pay employees” law that exists: offer to work for free.

Once your employer sees that you mean business (no pun intended), there’s no way they’ll let you leave. Think this sounds expensive? College is much worse. A month without pay might mean a $4,000 cost to you. College would take four years and at least $50,000, without scholarships.

Sometimes “oddball” alternatives get the same results with $40,000 and four years to spare.

Let’s Be Smart About This

A friend of mine recently told me the story from when she worked at McDonald’s back when she was still in high school. Someone came along and applied for a job. Under “educational experience”, the individual listed a 6 year degree in Calligraphy.

They hung the application on the wall and had quite a few chuckles.

They laughed because the degree was absurd and stereotypical. There are precious few things one can do with a degree in Calligraphy. Spending $50,000 was probably a bad choice. The individual could have simply learned the trade without the degree, and saved thousands.

Don’t go to a degree it isn’t necessary. If it is necessary, and you can make your money back with a typical job in the field you’ll be getting your education in, then go for the degree. Just rationally analyze your situation, your goals and the necessity of the degree, and you’ll be fine.

Find time to browse through the absolute student’s marketplace where one can sell used college textbooks through the sell back program at Valorebooks.com!

This is part of a series of articles on Rethinking College. Make sure to read the other articles in the series to learn more about how to make rational choices about a college education.

Related posts:

1. Don’t Go Into Debt for College
2. Rethinking College, a Series of Articles
3. Save Money or Make Money?

I’ll be challenging this view while showing that the numbers often just don’t add up. For a lot of kids, going to college is the worst thing they can do, regardless of the tired and overused social cliché. This is the first part of a three-part series on a rational approach to getting a college education and preparing for success.

Below are the titles of forthcoming articles here at Smart Personal Development.

• Is College Overrated?
• Don’t Go Into Debt for College
• 7 Ways to Get College Money
• Go to College for the Education

Note: I’m not a college naysayer. I’m actually enrolled with a state college, studying business, and marketing. I’m absolutely loving it, and would probably pay my way even if there was no future financial incentive. So what’s my point about college? It’s one that can save you thousands, whether you are a student or a parent. To read the articles, just subscribe below, and I’ll make sure you get the guides.

Related posts:

1. Don’t Go Into Debt for College
2. Most Don’t Need a College Degree
3. Personal Development Articles