Is a College Degree Worth it?

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College Degree

I read an article recently on Yahoo Finance that discussed a new study related to getting a college degree and the subsequent student loan debt that can come with it. As a side note, if you don’t read Yahoo Finance, then I highly recommend it as it has a wealth of information. The study showed staggering news for recent graduates and the perils they face in attaining their college degrees.

Like many of my friends, as I was growing up, my parents made it clear that I was expected to get a college degree. They thought, as many did then and still do, that a college degree paves the path to achieving success in our society. Unfortunately, unless you land a killer scholarship or have no means, college degrees aren’t free and can possibly set you up for failure in your life in the real world. To be clear, I am not wanting to debate the issues of government subsidization of higher education, but rather, to consider the high cost of a college degree and what that means for those involved.

How Much Student Loan Debt is Too Much?


Speaking from experience, debt in any form or fashion can take years to pay off. Student loan debt is no different. What I found staggering in this study was that students graduating with a college degree in 2011 were averaging nearly $27,000 in student loan debt. That is a crazy amount of debt! Sure, if you’re going into something specialized like medicine, science or engineering that number might be easier to pay back, but many do not go into one of those fields. The study also points out that the current economic climate is making it difficult to find quality work. Those with a college degree are faring better than the rest of the nation, but not by much.

A good way to avoid potentially massive student loan debt payments is to go to school online. Going to school online is the best option for anyone on a budget, as any bills that would’ve been associated with room and board are no longer an issue. Even if you went to a conventional university but didn’t choose to live on campus, this method of school still saves you money that would’ve otherwise been spent on gas.

There are Jobs Available for Those Without a College Degree


I think part of the rise in those trying to get a college degree is the myth that you need to have one in order to obtain a decent paying job. I will cede that, in general, those who have a college degree make more over those who did not go to college. It is also generally easier for those who hold a college degree to get a job versus their counterparts. However, there ARE jobs out there that are well paying, but do not necessarily require a college degree. There are many to choose from, such as a firefighter, dental hygienist, mechanic, or construction manager. These are only a handful of the possibilities, all of which are well paying yet do not require a college degree. My tip is to have students look at some of these before ruling them out to see if there is something that might suit them.

Debt 101 Should be a Required Course for any College Degree


I remember graduating from college and feeling like I could conquer the world, then came the grim truth of having nearly $18,000 in student loan debt. Which as it so happens took me nearly 10 years to repay. While I needed loans to get my college degree, there was not one class, not one lesson about debt or how to manage it. Sure, if I would have been getting a degree in business or finance I would’ve learned about things like that, but my degree was in History.

The question I want to pose is this: are we really preparing students for life by not teaching them about debt while they’re in college?

I would argue that we’re not. Sure, they have that nice college degree to hang on their wall, but is it worth it? Some might think that I can declare bankruptcy and get them wiped out…Wrong! Maybe if I die then my loved ones won’t have to pay them back…Wrong! Maybe if I can’t pay them then my loans won’t be sent to collections…Wrong Again! The point I am trying to make is that as a young person is looking at their future and whether or not it holds a college degree, be frank about the cost. It is likely that a college degree will be best for them, but for some it is not…and that is ok. There are plenty of jobs out there for those that are willing to work hard and master a skill. And if they do go after a college degree let them do so with their eyes open to the importance of student loan debt and doing their best to minimize it.

What are your thoughts? Are you surprised that someone who graduates with a college degree should expect to have $27,000 in student loan debt?


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John is the founder of Frugal Rules, a dad, husband and veteran of the financial services industry whose writing has been featured in Forbes, CNBC, Yahoo Finance and more.

Passionate about helping people learn from his mistakes, John shares financial tools and tips to help you enjoy the freedom that comes from living frugally. One of his favorite tools is Personal Capital , which he used to plan for retirement and keep track of his finances in less than 15 minutes each month.

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  • DC @ Young Adult Money says:

    “What I found staggering in this study was that students graduating with a college degree in 2011 were averaging nearly $27,000 in student loan debt. That is a crazy amount of debt! ” Haha, if only you knew how much we student debt we have. It’s more than twice that.

    I keep bringing this up on my blog and other people’s comments, but the problem is the subsidization of student loans and the fact that you can borrow as much as you want to fund a college education, even if it means leaving with 100k+ in debt. The subsidies result in higher salaries at Universities, plus fancy new buildings that need to be paid off. We can talk about it on a micro level but student debt will always be a problem until we fix system-level issues.

    • Catherine says:

      27k?! I wish!…mine is almost 4x that!! In response to DC’s comment…in canada it is not subsidized nor can you borrow and unlimited amount of money but in a way that makes it worse for us. For instance, for an undergraduate degree, you can only borrow 34k from any bank student LOC and national student loans also puts a 4 year borrowing max (regardless of how long it may take you to complete your degree) which also have a ”cap”. Provincial loans are the same but provincial loans cap your debt load to a maximum which is helpful (now, it was just introduced in 2011) How it hurt me was that I had maxed my bank LOC’s, student loans but went back to school so paid for tuition with unsecured LOC’s and credit cards….result…almost 100k debt and no one once tried to stop me. Was it worth it? Yup, I have a great career that I love.

      • John says:

        Wow, that is a lot Catherine! But, if you have a career that you love and one that allows you to knock out the debt that is great. I am talking more of not just doing it because “everyone” else is doing it. Making informed decisions is what I think is missing for many.

    • John says:

      Ouch, that is a lot DC. I completely agree with your point about subsidiaztion, however that is a different argument for a different day.

      The issue of it you should go to college is another issue altogether. My point was that we should not just fall prey to the belief that you HAVE to go to college. We have told ourselves that to get anywhere in society you must go to college. The problem is though, that we don’t prepare students to discern what they should do when they do go to college. I am talking about making an informed decision so you don’t end up under a pile of debt with nothing to show for it other than a fancy piece of paper to hang on your wall. I think this calls for preparing students, looking at options and making an informed decision and not just jumping off a bridge because everyone else is doing it.

  • justin@thefrugalpath says:

    My wife has two degrees and is underemployed at the moment. We were lucky that her parents paid for her education, she’s the first in her family to achieve that.
    I squandered my attempt at school because I didn’t know what I wanted to be. Now that I am back I do not qualify for loans because I screwed up so badly when I first attended. Now I pay by the class, which is pretty hard atm. I can only afford to take one or two classes a semester. I’ll get it done, just not sure when.

    • John says:

      I can relate to that Justin as I was underemployed for several years. That’s awesome your in laws paid for your wife’s education, that was the same thing for my wife as well. She also lived at home to keep the costs down as board costs can be huge.

  • Glen @ Monster Piggy Bank says:

    Interesting that you raise this topic as in Australia there is some news going around at the moment with titles like this – “Uni graduates likely to earn $1m more over lifetime” FYI – Uni = College in Australia.

    I have a degree and it has helped me land job interviews and a high wages than I would have been able to otherwise.

    I think a lot has to do with the profession that you are in and how much value recruiters put into certifications.

    • John says:

      I’ve seen similar stats for those here in the States Glen. That’s awesome your degree has helped you earn more. I totally agree that a lot of it rides on the major you choose which is why making an informed decision is key.

  • Michelle says:

    For me, college was just the natural choice I made and it worked for me. However, my bf didn’t go and now he’s making more money than I am!

    • John says:

      It was the same for me Michelle. It was just another step in life. But, your boyfriend is a testimony to why not everyone needs to go to college.

  • AverageJoe says:

    Great piece, John. Not only should “College Debt 101” be a required course, but “What Will My Major Pay” should be also. I have no problem with people following their dreams….as long as you know ahead of time that the music therapy major you just completed is worthless when it comes to finding a job.

    • Kim@Eyesonthedollar says:

      I totally agree. Getting a communications degree to wait tables is not necessary. (I know lots of examples of this very situation) A college degree can be good life skills even if you do choose a different career path, but only if you don’t have to go into debt to get one. I am still paying off my $60K+ in loans from optometry school and I don’t regret those at all, but you have to base amount of loans on potential salary.

      • John says:

        I would agree Kim. I think a lot of it comes down to the career path one chooses and make sure it’s one that you can manage to pay off your loans while at the same time provide for a way to grow your income over the years.

    • John says:

      Thanks Joe! I totally agree, great point! I am all for having people follow their dreams. But, as you said, music therapy will probably not land you that high paying job to pay off all the debt.

      • Pauline says:

        I think you should be allowed to follow your dreams, or at least pursue something that you are good at from an early age. I bet many music therapy majors are going to college because their parents forced them to instead of starting to teach music right out of high school. Some trades are regarded as not prestigious enough for many family, resulting on kids going to low school and dropping out. I don’t regret going to college but I got a free ride and had I had to pay, I probably would have regarded it differently. I have a master in business that I barely used in the past 10 years and knew I wouldn’t use but it was a way to keep having fun for five years all paid for by the state and scholarships instead of going right into adulthood.

        • John says:

          Thanks for pointing that out Pauline, that’s basically what I am talking about. I think we do a horrible job of preparing students here in the States in regards of their career/education. I think if we were to take a more active role at an earlier age it could help some things. I don’t regret going to college, but then again I came out with a fairly low loan balance. I am all for allowing people to pursue their dreams, but doing that while in college and combined with no direction will lead to a costly lesson.

  • Catherine says:

    I also want to add that I agree, college degrees are no the be all, end all. My hubby dropped out of university and went to a community college (which means something different here in canada) and now makes almost as much as I do with 2 degrees.

  • Leslie says:

    I was actively discouraged from attending college as my family (none of them college graduates) considers ‘hard-work’ the path to success. Because of this, I funded college myself. I graduated with a little over the above stated average amount of debt and all of my college debt is in the form of low-interest government loans.

    I worked A LOT during college to cover living expenses. I have many friends who used loans (government & private) to pay for their housing/living costs and graduated with a lot more debt than I have. More importantly, the job I had in college gave me 3 years of direct experience in my field that really provided an advantage when I went post-college job-hunting.

    • John says:

      That’s great your loans are lower interest and working while in college is great to cover some costs. I think enough of that is not being done. That’s awesome your job gave you some hands on experience to help you for once you graduated. Thanks for stopping by!

  • Holly@ClubThrifty says:

    I usually try not to being this up….but I didn’t go to college. However, I am a very very motivated person so I have done very well for myself financially and otherwise. I wouldn’t change anything really. I am happy where I am now and I had no student loans.

  • Jason says:

    I do think our mindset surrounding the necessity of student loans will really hurt our future generations. In Thomas Stanley’s book, The Millionaire Next Door, he talked about how many millionaires didn’t have college degrees and even those that did only sported a 2.4 average GPA in high school. The reality is that text book learning doesn’t teach you nearly as much as hands-on, real life experience.

    • John says:

      I totally agree Jason. I am actually doing a post on millionaires next week and saw the same thing. Textbook learning is great, but only takes you so far. Sure it helps, but I’ve learned much more in the “real” world than I ever did in college.

  • Newlyweds on a Budget says:

    As the first in my family to go to college, I have VERY strong opinions about having a college degree. So much so in fact, that my husband is now going back to school to finish up his degree, even though he’s on the path to become a firefighter. While you said that a degree wasn’t a requirement for that job, I can tell you that it will certainly come in handy later in life when he’s ready for promotions.
    I went to a pretty well-known school and graduated with $30,000 in loans, but I know for a fact that my diploma has opened doors for me. I’m currently at a company that won’t promote you unless you have a degree, and I’m actually going back for my master’s so I can keep getting promoted. A colleague of mine was told she couldn’t advance in the company unless she got her degree. And only 5 years out of school, and I’m already making more than my mother. Yes it sucks to have debt, but it’s not like it’s unbearable. And I’m working to pay it off. To me, a college degree and debt, is completely worth it, because I know I’m making a crap ton more now than I would have had I not finished college. P.S. I grew up in the ghetto and saw many of my friends drop out of school and have kids early.. They’re struggling way more than me…

    • John says:

      I think you’re missing my point. My point is that we must make informed decisions and not just do it because “everyone” else is doing it. I think we have to look at the options before us and make the best decision based off of our findings.

      The fact is that many people go to college, have no direction and end up with loads of debt and no real way to pay it off other than decades of payments. Or, they come out of college and they’re underemployed because the current economic climate.

      It’s great when a degree opens doors for you, I’ve benefitted from it myself but I have also experienced the other side as well. My larger point is that college is a major decision to make in one’s life. Take time to make the decision and find what is best for the student. Maybe it is college, but maybe it’s not. But, don’t just do it because everyone else is doing it.

  • Edward Antrobus says:

    That is almost exactly how much I wound up with in student loans for my public school education.

    I think that post of the problem I’d that you will never convince an 18 year old of the possibility that they won’t be able to pay their loans.

    • John says:

      I would tend to agree Edward. I think that being realistic is necessary when making the decision.

      • Edward Antrobus says:

        I don’t think that its a matter of being realistic. In most cases, it is more an issue of having enough experience to predict how the future may turn out. That’s hard enough to do as a mature adult. Most teens aren’t going to have a chance at realizing how badly life can go off course.

        When I graduated high school, I probably had a better idea of my plans for the future than most people that age. 13 years later, the only part that is the same is the fact that I graduated college and even that was after a 5 year break.

        • John says:

          I can see your point Edward, and that’s a great point that adults have that challenge as well.

          I guess my point was that we don’t do a good job of helping students look at the different possibilities and helping them see what they could do. I think the key is doing that before they start so as to not rack up loan debt just for the sake of going to college.

  • Veronica Hill says:

    I have mixed feelings on this issue. The amount of debt people are coming out of college with now-days is just sickening. Based on that debt alone, I’m so tempted to just say don’t go to college. I’ve gone to school and frankly didn’t learn a whole lot there. I know more now from reading blog posts than I learned in school (oh and still paying my debt).

    However, that being said I also noticed that any job I’ve applied for has ALWAYS asked for a college degree. Now… you could probably get away with just lying but that’s not something I condone. My school may have not taught me much but my degree did help me get jobs. Also, there are some professions which absolutely require a degree and will take time to check to see if you’re honest. Lawyers come to mind.

    And I absolutely agree with you, we need to have a class on student debt in school. In fact, make it class #1, semester 1 requirement.

    • John says:

      I have mixed feelings on it as well Veronica. I benefitted from college, mostly, but have numerous friends that went because “everyone else is doing it” and got no where or are horribly underemployed.

      Higher Ed is needed for many career pursuits, but not for all. I just see it as such a major decision in one’s life that it’s a shame that we don’t help students out more to make a wise decision and help better set them up for life.

  • CF says:

    Perhaps a debt management / student loan 101 class should be mandatory before loans are given. It might make people more aware of the debt that will face them once they graduate.

    I can’t complain too much. Both of my college degrees got me a job – my 1st degree cost $35k and I got a job right out of school that started at $39k. My second degree was free because I was a bit more clever and took advantage of work benefits to finish the degree. It got me a job right out of school earning almost 50% more than previous. It’s all about the career you chose. I wish I had started in Computer Science right away instead of wasting my time with genetics and biology research.

    For my sister, she chose to go to college. I encouraged her to do French and International relations and I found her a part time job at a management services company which plans international conferences. I think she will do okay. Her degree will cost her around 25-30k but she should make around $35k to $40k when she finishes. It’s a flexible degree with lots of potential career paths (government, non-profit, education, event management, etc.) which is why I supported it.

    For my youngest sister, I will encourage her to go to a trade school for something she is interested in, such as culinary arts.

    • Edward Antrobus says:

      My loans required an entrance “exam” in which I was required to know that the loans had to be paid off and that I couldn’t get rid of the debt with bankruptcy.

      But knowing something and understanding it are two different things.

      • John says:

        I completely agree Edward. I had something similar in my case. But, it was like the user agreement you get before signing up for something. What 18 year old is going to understand the ten pages of legalise when they’re getting a loan? Not many I think.

    • John says:

      I totally agree CF. That I mentioned to Edward, there was some sort of agreement I had to sign. But, how many 18 year olds are going to fully understand that contract and its implications. Not many I think. It sounds like you had a goot set up and getting a nice pay bump is a great reason to get a degree.

  • Sam says:

    I agree with your underlying message as college degrees make sense only if you really think about how the degree will pay off in the long run. Some people should go to school, even if it means taking on $100k in debt. Doctors are a good example of people who spend a lot but also make a lot.

    Going to college just for a piece of paper to study something that won’t bring an income is, however, a complete luxury expense, not an investment.

    • John says:

      I completely agree Sam. Of course that are interested in something highly specialized should go to college and they can generally knock down that debt fairly quickly…as opposed to someone who waits tables. Thanks for stopping by!

  • The College Investor says:

    A college degree is worth it – with some conditions. I must be a college degree that will provide a return in the future, in terms of salary. For example, spending $50,000 to get an art degree is probably not worth it. However, spending the same amount to get an engineering degree could be worth it if you go into a well paying field.

    • John says:

      I totally agree. I think it comes down to deciding what you’d like to do and putting some thought into it before you make the call. If you’re going to make a decent wage with the selected degree then I say go fo it.

  • Tackling Our Debt says:

    For me college was a natural step as well. I went to college, my husband didn’t. 8 years ago we met at the corporation we were both working for. We worked in IT and both made around 70K a year. Whether a person had a degree or not really didn’t influence the type of job they got or the rate of pay.

    • John says:

      That’s a great instance of what I am talking about. Sure, the degree might help you get a promotion in the future. But I would imagine that IT is largely learned by doing and not necessarily by textbook learning. But then again, I could be wrong. 🙂

  • Savvy Scot says:

    College degrees are definitely losing weight. There has never been a better time for people to try their own business with very little risk and startup costs – anyone can run a website and get going for next to nothing!
    Personally, I have a Masters degree and I like to remind people that I studied for 5 years and paid 0 in tuition due to getting free education in Scotland! Although I am extremely grateful, I don’t think this is fair. Given my degree is in Engineering, I would definitely have still paid for it to open the same doors for my career choice

    • John says:

      I would tend to agree. There’s only so much education you can get through higher ed. I think that “real world” learning provides many more learning opportunities, in general. I have a Masters as well in Finance and we’re still paying on it. Sure, it opened up some doors for me, but not to the extent that had been explained to me.
      That’s great you had to pay nothing for your Masters! If I was in your situation, I would’ve paid for the education as well.

  • Miss T @ Prairie Eco-Thrifter says:

    I know multiple people that have degrees that can’t find jobs because of the current market and it sucks. I have always been a believer in tangible hands on skills compared to book skills. For myself, these skills have been what has gotten my great jobs without a degree. It all depends on what field you want to work in though. Fields like medicine and stuff you need a degree.

    • John says:

      That’s the same for me Miss T. I think the fact of the current economic climate is just shedding more light on the issue. Learning from books is great, and I encourage it, but I totally agree that more real life experiences teach better lessons and go farther in general.

  • Daisy @ Money Smart Guides says:

    There have been so many studies that show that people with degrees make more money (by a LOT) than people without them. Plus, jobs are more stable when you have a degree. I don’t think that all students have to go into debt to get their degree; my education cost me a lot of money but I paid for half of it out of pocket while working.

    • John says:

      That’s a great point Daisy, that in general you make more with a degree over your life, and one that I made. But, there are as many studies showing that many millionaires do not have a college degree.

      My argument was that a college degree is not an end all be all. We should not force students in to college, if it’s not best for them, because “everyone else” is doing it. It calls for an informed decision and prepraring the student for college appropriately. The fact of the matter is that a lot of students go into serious debt to get a degree and are saddled with years of repayment. Yes,college is great, and for most it’s the way to go…but it’s not for all and you can still do great things without going.

      • Helen says:

        I’m sure that many who attend college today , in 2013, are doing so because a peer or possibly their parent pressured them to attend.
        I attended a trade school at age 49 and had years of experience in the medical arena. I was a young child who knew and understood the value of working hard for everything. Before social security was enacted, I worked and didn’t find my nursing niche until later in life.
        Looking back now, if I could have afforded a nursing degree, rather than a lower paying licensed practical nurse, I would have done so.
        I agree that there are no guarantees of employment just because one has a degree. However, now that I have retired and see my life in retrospect… I wish that I had the RN license .
        Not all fields require a license or a degree…. Great article and well worth reading the comments.

  • femmefrugality says:

    I agree with the Debt 101 class requirement!!!! Heck, I think they should be teaching that in high school. I’d still advocate for a degree, with the caveat that you be savvy about what you’ll actually be able to do with it, salary expectations, and if it’s worth it. Serious cost analysis. Honestly, aid won’t come close to covering a four year degree even at a state school, so even if you’re not well off that’s not going to eliminate loans. BUT you will probably be eligible for more scholarships.

    • John says:

      I would totally agree. I think basic financial education is sorely lacking in our society, so I think it would be beneficial. I completely agree that a serious cost analysis is important when deciding if you should go to college and the degree you decide upon.

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