All millennials were told growing up that we need to go to college. College is really the only path laid out for us while we go through high school preparing for the real world afterward.
From all of the information that we are given we “know” that we are supposed to go to college. We “know” that college will give us the opportunity to grow and will “result” in a job after college in which we can support ourselves and our growing family. All we have to do is go to college and everything will work out. Right?
Well, I am here to tell you that all of this supposed knowledge we have is false!
Let me explain.
Opportunity Cost of College
What is not shared growing up is that not all college degrees are created equal. Some have the opportunity to start at a high salary and continually grow, while others have little to no opportunity for employment after college.
College is touted as the place you go to learn about yourself and become a real adult. I will argue that college is where you should go to gain employable skills and should not be undertaken lightly.
College needs to be seen as a means to an end. The end goal of college is to be able to make enough money so that you can support yourself and your growing family along with saving for retirement.
Going to college just for the sake of going to college does not make sense. Look around any college campus and you will find a large percentage of students that enter with no declared degree path. I do not blame the students for this problem, but our high school educators. The issue is one of economics.
College needs to viewed through the lens of economics. Look at the opportunity cost of college and then evaluate whether it is worth it or not.
Opportunity cost is the loss of potential gain when an alternative is chosen.
In other words, you need to look at the cost of college over 4 years and the potential experience and wages you could have earned during that time. If you will recoup the cost of college shortly after graduation (say within 5 years) then it may make sense to go to college for your degree. However, if you enter college without a plan, spend 6 years figuring out that you are going to major in music and come out to be an insurance adjuster, then you probably wasted your time and money on the pursuit. Opportunity cost will help to decide whether the pursuit is worth your time or not.
Employable vs Fluff Degrees
Keeping opportunity cost in mind we now need to look at the degrees that are available in college. There is a full spectrum of degrees out there from STEM (science, technology, engineering, and math) to liberal arts (English, history, music, art, etc) and everything in between. Not all of these degrees are created equal. Some have a higher starting salary than others. Others have opportunities to be employed anywhere you live, think nursing or teaching.
When deciding on a degree to pursue in college you need to also weigh the employability of your degree. A degree such as music is not very employable. I use this as an example because I planned to double major in music along with my chemical engineering degree, however, I dropped it in favor of just chemical engineering because it was not worth the extra effort. With a music degree, the only thing you can do is teach or go on to graduate school. Teaching requires further credentials, especially if you didn’t specialize in teaching music in college.
I qualify music as a fluff degree because it is based on a skill that can be learned outside of college. The Chicago Symphony does not care where you went to school, they care that you sound amazing and you are a good musician. If the field you are going into does not require a degree, then you are likely wasting your time and hard-earned money in college. Not to mention the earning potential you would have had during those college years.
There is a lot of argument surrounding the subject of which degrees are fluff degrees and which are not due to emotional attachment. I am not going to detail which degrees are fluff, but you can analyze a degree and see if it makes sense to need a college degree for the field or not. Opportunity cost can help in the analysis of fluff degrees.
I define an employable degree as one that is easy to get a job in after college and one that truly requires a college degree. There is a good reason for the push in STEM degrees. They are the ones that conceptualize, design, and build everything around you.
Check out Forbes list of Bachelor’s Degrees with Highest Salary Potential. What you will find is that 100% of them are STEM degrees. If you are looking for an employable degree out of college with a high salary potential then look no further than STEM degrees.
However, STEM degrees are not the only employable degrees.
The joke going through college is that any good engineering school needs a good business school. Where else are the engineering dropouts supposed to go?
It is a funny joke as an engineer, but looking back, business degrees are actually more employable than most engineering degrees. Every business needs help being run. Every business needs management and direction. It needs accounting, logistics, marketing and the like. However, the question really is: do you need a college degree to be an entrepreneur or a business director?
Employable degrees allow you to get a job out of college while fluff degrees will leave you in debt wondering how you will ever pay it back. If you have measured the opportunity cost of going to college and find that you should go to college and major in a specific degree then you should pursue it. However, if after looking at the opportunity cost of college you find that pursuing the trades or starting your own business is the path best suited for you, then you should skip out on college. There is a time to listen and learn from your teachers and mentors and there is a time to think and decide for yourself.
- Measure the opportunity cost.
- Weigh your options.
- Pursue the best fit for you.
Only you know what is best!
Did you go to college and regret it? Did you weight the opportunity cost of college before entering? I know I didn’t. Let me know in the comments.
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