codyg1985’s Think Tank

Conventional wisdom would lead you to believe that college is essential for one to earn more money. However, seldom does one consider the cost of a college degree. The argument in this article is that generally those who go into the workplace after graduating high school tend to earn more overall than college graduates when college loans are considered.

If the only way to pay for college was out of your own pocket without any help from parents or anyone else, then yes, college would be a bad investment for many people, and college graduates would generally incur a large debt that would take years to pay off.

However, one thing that was downplayed was the importance of scholarships and grants. Grants are generally available to those whose income is below a certain level or to those with disabilities, and scholarships are awarded on the basis of good grades and/or leadership through extracurricular activities. Most people can get more than one scholarship that can cover most if not all college expenses. When grants and scholarships are factored in, college is less expensive to the person attending. That person will take out less-expensive loans that can be paid off quickly, or that person can pay less out of pocket.

But just because the monies are coming from another source doesn’t change the effective return. It just distributes the poor investment to a wider pool of people (taxpayers and parents).

Everyone pays taxes regardless of whether or not one attends college. So, if you don’t go to college, one still funds college attendance through tax money that funds grants and scholarships. Scholarships are often funded through endowment funds, which means that there is a one-time investment that earns enough interest each year to pay out scholarships for a few people while maintaining the same amount of money in the bank. As a result, once a scholarship is established, generally there is not any need for additional funds to cover the expense.

Some states offer tuition assistance to those that have a certain GPA in high school and are able to maintain a certain GPA in college. Those programs are often funded through state-run lotteries, meaning that those who put money into the program do so voluntarily. For example, in the state of Georgia, the Georgia HOPE (Helping Outstanding Pupils Educationally) Scholarship and Grant Program offers tuition assistance to those who maintain a 3.0 GPA on a 4.0 point scale in the College Preparatory curriculum and a 3.2 GPA to those in the career/technology curriculum. In other words, those students that can maintain a B average in the advanced curriculums can get the majority, if not all, tutition paid for if those students attend a school within the state or Georgia.

Regardless of the funding source for college, the only thing that is relevant in determing the return on investment (ROI) of the person attending college is the finances of the person attending college. Whether or not the parents pay for the education is a non-factor. Even if the parents have less money in the end, the effect on the child is negligible at best. Since taxes that would fund some grant programs and some scholarships are paid by everyone, college grads and high school grads alike, that issue is also irrelevant.

What these numbers indicate is that trust fund babies (or anyone who has parents paying the college tab) would be better off taking their college funds and investing them, bypassing college entirely and working at whatever job they could get without a degree.

At 18, many are ill-equipped to make a rational decision about whether to take on $70,000 of debt pursuing a degree…

Just as the author stated, at age 18, most are not smart enough to make a decision about a large sum of money, and even if they were, there is no guarantee that investing money in something will bring about a appreciable return. If it is gambling to invest your money in a college education, then it is Russian Roulette to invest your money in the stock market, as the author seems to suggest. There is a good chance of a decent ROI if the person goes to college for a degree that’s in demand (i.e. engineering, law, medicine). Investing that money in the stock market may give a higher ROI, but unless the child’s parents deal with the stock market everyday, there is a much greater risk investing in the stock market, which means that the investment may not yield anything.

The short answer to question posed in the title of this article is no, college is not a high-stakes gamble, compared with other alternatives. College may be an expensive investment at first for some, but most that go to college have some sort of financial aid available to them in the form of grants, scholarships, and/or state-funded tuition assistance that slash the up-front costs of attending college. Also, an investment in college would bring a more dependable ROI than an investment in the stock market.