Justin's note: It's one of the biggest myths out there…the idea that college is for everyone. Today, we're sharing a new essay from Casey Report editor E.B. Tucker—with special commentary from Doug Casey—to show you why. If you're preparing to send your child or grandchild to college in the fall, this is one you'll want to read very closely…
By E.B. Tucker, editor, The Casey Report
Jackie Krowen made a big mistake.
It only took a couple clicks of the mouse…but she’ll be paying for it for the rest of her life.
She racked up more than $150,000 in student loan debt to become a nurse. The average nurse in the U.S. earns $5,660 per month. After taxes and living expenses, Jackie barely scrapes by.
Jackie is the security for her loan. She can’t get rid of it. She can’t hide from it. She also can’t ever pay it off.
She says it ruined her life.
Jackie isn’t alone…42 million people have student loan debt in the U.S.
Together, they owe more than $1.3 trillion.
Today’s mountain of student loan debt cripples the U.S. economy. It buries young people in unpayable bills. It sucks hundreds of billions out of the private economy.
If you’re influencing your child or grandchild to go to college, I want you to read today's essay very closely.
The Myth That College Is for Everyone
Most young people have it drilled into their heads that they must attend college. Any question of costs gets a scowl from the older generations.
However, college is not for everyone.
Take my good friend Mike, for example.
Mike owns a residential plumbing service company. He has more than 50 employees. Last year his company did $5 million in gross sales. Mike cleared $500,000 in profit. He has a family, a beautiful home, and—most importantly—he’s happy.
But society frowns on a young person that wants to be a plumber. There’s constant, unsolicited advice… “Get an education.”…“Invest in your future.”
This is all terrible advice. An ambitious plumber has a much brighter future than an indebted graduate like Jackie.
A Modern-Day Debtors’ Prison
Family members acting like armchair advisors should be more careful about the advice they give today’s teenagers. More importantly, teenagers should consider the source of the unsolicited advice they get.
It’s safe to say that finishing high school is a good idea for nearly everyone. Most 16- to 18-year-old kids don’t make great employees anyway. Algebra, biology, and even recess are probably more productive use of the workweek during those years.
Armed with a high school degree, 18-year-olds should consider the facts before deciding what to do with the next six years. We say six because finishing college in four years is less common than you’d expect.
Increasingly, kids are not considering other options. Last fall, postsecondary schools counted 20.5 million students enrolled. That’s up 30% from 2000.
As you can see in this chart, more than half of all U.S. 20- to 21-year-olds are in college.
According to a survey conducted by Consumer Reports, 45% of these students will borrow money to pay tuition and expenses, then quit without receiving a degree. They’ll report that college “wasn’t worth it.”
After six years, the graduation rate rises to 60%. The other 40% quit along the way.
Saddled with debt, these dropouts feel too good for plumbing and unqualified for the corporate world.
Victims of Bad Advice
The class of 2017 graduated in May. On average, they carry $37,000 in student loan debt.
Many graduates have unrealistic income expectations. They think all the debt incurred to get a bachelor’s degree somehow entitles them to a high-paying job after graduation.
According to the National Association of Colleges and Employers, $52,569 is what this year’s graduates should make at their first job. Engineers, computer scientists, and other technical specialists stretch that average higher. They also paid a lot more for the degree than liberal arts majors.
On average, pay isn’t rising very much. Even the increases since the last recession don’t keep pace with explosive college costs.
We don’t have anything to say about the cost of college. Prices in a free market should be free to go as high as customers will bear.
Students seem determined that they need to go to school at all costs. And we didn’t even get into how these students are using up four of the most healthy and energetic years of their lives.
While graduates blame schools, government, and society for their education decisions…we wonder if they’ll start blaming the friends and family who influenced them.
Editor, The Casey Report