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Value of a College Degree …

September 14, 2010

I was reading various blogs and came across two stories discussing college degrees that I thought were interesting. It seemed like a theme that I had randomly stumbled across.

The first is an article by Eric Fry titled A College Education of Diminishing Returns

He tells the story of two high school graduates and one who chooses to go to college; while the other takes the money he would have spent if he went to college, but instead invests it.

The difference seemed interesting. as well his point that there is a point of diminishing returns for college degrees if everyone has one.

Today, more than 25% of Americans hold a bachelor’s degree – five times more than in 1950. But guess what? A bachelor’s degree ain’t what it used to be. The Law of Diminishing Returns is having its way.
Eric’s contention that government involvement via Sallie Mae of funding college degrees has
  1. inflated the price
  2. decreased the value to the market place
  3. unknown quality increase, as more degrees are completed / awarded
I liked his suggestion at the end of his article …
As a well-heeled acquaintance from Manhattan quipped recently, “Hey it’s gonna cost me $250,000 to send my kid to an Ivy League school. I’d rather just use the money to buy him a business, and let him figure it out in the real world.”

It’s definitely a unique take. And probably will allow the kid to learn more from real world experience and learn some self reliance, how to really deal with people and a better investment in case the business doesn’t do well. There should still be some assets to sell at the end of the process.
The other blog post that I came across in a similar veign, but a little bit different was by Len Penzo titled 22 Signs Your College Degree Might Not Be Worth the Money
He has a bent that people who graduate from more technical schools had the best net annualized return on investments. Only one school was known for liberal arts; while six of the top 15 were institute of technology that specialized in engineering, science and/or technology degrees.
you’d be wise to select a degree that requires you to take courses that are always in high demand by employers – if you plan on getting a reasonably quick and decent return on your college investment, that is.
His perspective seems to be coming mostly from a ROI perspective; as well as finding a decent to well paying job after graduating. But in his comments he did suggest that someone pursue marketing if it is truly their passion.
From a practical perspective, I’d have to agree that technical degrees have a higher likelihood of finding a job. But there are other circumstances that are out of the control of recent college graduates i.e. state of the economy, and how likely businesses are to hire in a recession or the double dip depression that we are in the midst of.
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