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The UnCollege Blog

Why a College Degree Isn't Your Ticket to Financial Security

Many of us have heard of a statistic that's been thrown around over the past decade: college grads will earn $1 million more than people with only a high school diploma. But a 2009 Forbes article challenges that claim:

“Like many good cons, this one contains a kernel of truth. Census figures show that college grads earn an average of $57,500 a year, which is 82% more than the $31,600 high school alumni make. Multiply the $25,900 difference by the 40 years the average person works and, sure enough, it comes to a tad over $1 million.

But anybody who has gotten a passing grade in statistics knows what’s wrong with this line of argument. A correlation between B.A.s and incomes is not proof of cause and effect. It may reflect nothing more than the fact that the economy rewards smart people and smart people are likely to go to college.”

In reality, it’s kind of a crapshoot as to whether a college degree will earn you more money. You will earn you more money, by investing in your education (whatever that looks like), by learning how to earn money, and by learning what to do with money once you’ve earned it. Here are several reasons why just getting a college degree won’t give you the financial security that you need:

  1. It forces you to spend money before you have it. 

    The Institute for College Access and Success reports that “seven in 10 seniors (69%) who graduated from public and nonprofit colleges in 2013 had student loan debt, with an average of $28,400 per borrower.” Meanwhile, on my Facebook feed, I see a lot of high school friends apparently having the time of their lives at university -- drinking, partying, and “chilling.” It makes me wonder: can they actually afford this?

  2. It doesn’t guarantee you a job.

    In a January report, the Federal Reserve Bank of New York found that roughly 44 percent of recent graduates—meaning those ages 22 to 27 with a B.A. or higher—were in a job that did not technically demand a bachelor’s degree,” a 2014 Slate article reads. So while getting a college degree might give you a better shot at employment because it signals higher education, it’s not nearly a guaranteed way to do so. It might be a better idea to signal your learning in other ways.

  3. It doesn’t teach you how to do well at your job.

    Succeeding in an academic environment requires a very different set of skills than succeeding in the work environment. For one thing, at school you’re supposed to do what the teacher says. At work, you’ll often get ahead by (gently) challenging what your boss says. At school, you learn how to skate by with the highest grade (remember those night-before essays?!). At work, “skating by” is not a particularly good strategy. (I found Promote Yourself to be a particularly good book on succeeding in a work environment.)

  4. It doesn’t teach you how to make money, other than getting a job.

    The greatest problem with relying on university to help you become financially secure is that it only offers security in the form of a job. Now, there’s nothing wrong with getting a job, except that it leaves you at the mercy of one person to determine whether you’re secure. We would do better by learning how to make money, other than just doing well at our job, whether that’s building our personal brand, learning how to network, or becoming an “idea machine.”

  5. It doesn’t teach you how to manage your money, once you’ve earned it.

It’s really easy to spend money. Many people don’t learn how to control themselves when it comes to money, and develop vicious spending habits that leave them in debt, regardless of how much money they’re earning. Since personal finance classes aren’t required for most degrees, many people never learn how to manage their money. Luckily, you can learn this on your own. There’s a great subreddit on personal finance, and Ramit Sethi also offers useful advice on how to take control of your money.



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