August 11, 2009

A Lot of People Waste Money Going to College.

I want to preface this article by being clear that I think a college degree is usually one of the best financial moves that you can make. A college degree can be worth a lot. However, going to college isn't necessarily a good move for everyone.

We probably all personally know people who either aren't utilizing their degrees or didn't graduate from college.
One of my friends went to a private college and ended up with significant loan debt. He got a liberal arts degree and has not yet found work that actually required a degree. My sister went to college for a couple years and quit. A cousin of mine went for maybe a year before dropping out. In my family we have 5 people from my generation who went to college and only 3 of us graduated.

This is a common occurrence. A lot of people go to college but many of them do not graduate. 68.6% of the population goes to college out of high school according to the BLS. When I graduated high school about 80% of my graduating class was headed to college. Thats a lot of people going to college. Unfortunately many of those people will end up wasting their time and money in college.

According to WSJ, only 60% of students of 4 year schools graduate within 6 years. At less competitive schools the graduation rate is even worse dropping as low as 34.7% at non-competitive schools.

If you combine those two statistics that means that 68.6% of the population goes to college and only 60% of those graduate so 41.1% of the population attends college and graduates but 27.4% of high school graduates attend college and do not graduate.

With 68% of the population going to college and 60% of them graduating that means that 40% of the population will end up with a college degree. There are not enough jobs out there that really require the skill level for a degree. Many of the people getting college degrees today will end up in jobs they could have gotten without a degree.

If you or someone you know is on the road to college then it would be smart to stop and make sure that college is a good financial move. A college bound person should honestly ask themselves : What are the chances that you'll graduate? What do you plan to do with your degree? Will you be able to make a decent living based off your degree? If you don't have a good plan for college that will lead to a reasonable income level then maybe college isn't the right move just now. Whether or not college is a good financial move depends on the details of your financial situation, what career field you're going into and what your personal motivations are for college.

Of course the financial benefits of college are not the only benefit. Going to college is a learning and growing experience that is worthwhile in itself.

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