fifty50. / is college worth it?
a collection of thoughts on why college is worth it, why it isn't, if student debt relief works, whether college should be free, and my (unsolicited) advice to new students.
I graduated from college last week. After four years of an edu-vacation in New York City, it’s time to answer an important question (that my parents have been asking me): is it worth it?
my (research-backed) takeaways on if college is worth it:
College, from what I can make out, serves only two purposes (especially true if you get a non-STEM degree as I did): The first is the signaling to employers that you are a hard worker, that you did well enough in high school for a higher-education institution to give you “the privilege” to pay them thousands of dollars to earn a degree, and while at that higher-education institution, you showed up to class, did work with proficiency, and likely learned a thing or two on the way. The second is to meet great people.
we live in a caste system of credentials.*
Sorry every college counselor ever, the brand name of your college matters. Employers create a list of target schools (usually Ivies plus a few more) that they will fill their first-year roles with, and only after that will they go to other schools for recruiting, choosing only those who perform remarkably and have convinced a higher-up within the company to give them a referral. Anyone telling you U.S. News college rankings is meaningless is misleading you - yes, the actual education at any college is comparable, but going to a well-ranked school is a huge indicator of whether an employer of your choice will target your school for job offers.
And, don’t buy into the new fleet of online career gurus telling you that college is a waste of time. Studies unequivocally show that going to college dramatically increases your lifetime earnings. Does not going to college work out for some people? Yes. But the overall trend is inarguably strong, and the likelihood of you becoming the next Bill Gates is (statistically speaking) close to zero.
Those who go to top colleges have around 50% higher starting and mid-career earnings than those graduating from the remainder. Students from low-income backgrounds will do pretty much as well as the rich kids after graduating from a top university (see chart below). And, top schools are far more likely to produce self-made millionaires.
show me your friends and i’ll show you your future.**
The second, and I think far more important, purpose of college is to meet great people. A mantra I have always lived by is that you become the average of the people around you: your hardest-working friend makes you work a little harder, and your laziest friend makes you a little lazier. Research backs this. So what better place to make such friends than at a university that hand-selects smart, driven, and interesting people from high schools across the country?
Thinking you need a work-life balance is the wrong mentality. Time spent with friends is not a trade-off from time spent studying. You need both a strong social life and strong academic performance for either to be a successful part of your life. Studies reveal having a strong social life translates to strong academic performance. This doesn’t mean going out the weekend before an exam will help you do better on the said exam (trust me), but that spending time building strong relationships and surrounding yourself with motivated people will help reinforce high aspirations and good habits.
In the same vein, those high-caliber people don’t want to be friends with bums. To surround yourself with motivated people, you need to prove that you too are motivated. That you’re willing to spend a weekend in the library, and you’ll encourage your friends to make good decisions for themselves.
I am incredibly lucky to have made great friends during college. So, it was worth every penny.
the world’s most broken market-place
Just kidding, it’s not worth every penny.
The cost of tuition has risen from an average of $2,000 for a private 4-year college education in 1960 to $36,000 today, and the quality of education definitely has not gotten 18 times better.
As every adult have ever told that I go to NYU will remind me: tuition for that school is incredibly expensive. The ticket value is around $60,000 a year, not including rent and food.
The higher-education marketplace is the most broken of any: as the gatekeepers of the American dream, colleges provide an incredibly inelastic good, while the U.S. government agrees to pay any college price tag on behalf of the student through their incredibly generous federal guaranteed student loan program.
This started in 1965 when Congress passed the Higher Education Act, which gave federal and state governments the ability to cover a loan to any student pursuing a college degree. Essentially, any student that wants to get an education can guarantee the federal government will pay their tuition up front to the college, and the student will pay back the government in student loans over the course of many years. This is a great program in theory, as it closes the access gap to college for high and low-income students, but has perverse market effects.
Let’s say you started a coffee shop - that sells a special coffee that on average will increase your lifetime earnings - and you sell the coffee for $1. Someone comes along wanting your coffee but doesn’t have money on them. So the federal government comes in and promises to pay whatever you charge for that coffee so that the person wanting it can get it. You charge $1 and the government gives you the dollar. You charge $2 and the government hands over two dollars. You charge $36,000 and the government reaches into their pocket and gives it to you. The person getting the coffee doesn’t mind, they are told they will be able to pay the government back through the coffee’s special powers of increasing your lifetime earnings, and people tend to overestimate their ability to pay back money.
And thus, the cost of tuition has ballooned.
Burying our most talented students with debt is a uniquely American idea with incredibly unAmerican consequences - debt makes our young people far less risk-taking and entrepreneurial, it delays young professionals’ willingness to quit jobs they feel underutilize them, exacerbates the brain drain of young people leaving their hometowns to work in the same three cities (New York City, Boston, and San Francisco), while discouraging talented young people from across the globe to immigrate to the U.S. to be educated and work.
The $2,000,000,000,000 wealth transfer from young people to higher education institutions does not need to be the perpetual status quo for the United States.
should we get rid of student debt?
President Biden has relieved the most student debt of any U.S. President, though they are many calls to get rid of student debt altogether. While such a program has obvious benefits, as discussed above, such a policy is misguided in that it helps many who don’t need it.
In 2014, Harvard, Yale, and UPenn graduates held a collective $4 billion in student debt. As we discussed earlier, these are the cream of the crop students with the highest expected lifetime earnings. Young law firm professionals and recent medical school graduates hold a disproportionate amount of student debt but are also among the highest in expected lifetime earnings. Additionally, low-income students (family incomes of less than $30,000) hold only 20% of all student debt. A better policy is to have income-targeted debt relief to ensure only those who need help receive it - this is similar to what the Biden administration’s debt relief policy has been thus far (with limitations).
Relieving student debt is solving the symptom, not the disease. The core of the problem is rising college tuition, which should be addressed directly.
so, free college?
It is unclear if free college, putting the massive federal costs aside, will have the desired impact. In 1998, England ended its free college program after realizing that free college was exacerbating income inequality rather than alleviating it. Yes, you read that correctly.
The issue with any free service is that it creates unlimited demand for limited supply, resulting in colleges rationing their seats to only the top students. However, those with wealthier backgrounds do better in pre-college academics; for example, in the U.S., rich students will consistently score better on the SAT. Everything from access to strong pre-K and preschool programs to premium test tutoring necessitates it. In England, the free college program forced colleges country-wide to only be able to offer services to those who performed the strongest in high school - the rich kids. Over the years, the college attainment discrepancy between rich and poor kids widened.
So, in England, the progressive movement campaigned for increased tuition so that colleges could open more seats, finance better resources per student, giving less well-off students a chance to get a degree. Since 1998, the end of England’s free college program, the fast-increasing differences in college degree attainment between high and low-income students have stabilized and even slightly decreased.
in defense of our higher education.
America’s colleges are the best in the world. This is as per a variety of different lists, such as the Shanghai Rankings, U.S. News, or the Times Higher Education World Rankings. This isn’t based on some false notion of prestige or brand; U.S. colleges are highly resourced, and are constantly updating their state-of-the-art computer labs, research facilities, and course curriculums, and attract the best academic talent in the world. Of the top 10 universities with the most Nobel laureates in their faculty, nine are American. About 2 out of every 10 people to ever earn a Nobel Prize have been produced from just one American University: Harvard.
Yes, it is true that a large part of these research prizes and high academic caliber are concentrated at the Ivy League, but even local colleges in America, such as city or state universities, result in far more income mobility opportunities and on average have better resources than local colleges in Europe, and especially when compared to Asian countries. Thus, my local state school, the University of New Hampshire, can attract bright students from across the world and boasts a student body hailing from 70 different countries. Local universities in other countries don’t come close.
Does this mean the high tuition these colleges charge is worth it? Not necessarily, but at least the price tag is (somewhat) justified. Americans have the privilege of shopping amongst the Gucci and Prada of colleges, and that comes with a Gucci and Prada level price tag.
closing thoughts: my (unsolicited and potentially awful) advice to new college students.
With my graduation last week, I want to consolidate my advice to new college students in one place. No one asked for this, but you’re welcome anyway.
1) Don’t take life advice from seniors. I know, ironic. Seniors have only lived 3-5% more of life than you, and none of it in the real world. Seniors (and I am guilty as well of doing this) have a lot of prescriptions to give to freshmen about what is the best or most worthwhile career, classes, or major to pursue, but in the end, that is just what has worked for them. That won’t work for you, because you are a different person. It’s best to treat seniors' life advice like a buffet - get everyone’s thoughts, and then pick and choose what sounds the best for you.
2) Get involved as much as you can on campus. Join clubs, meet people, talk to Professors at their office hours. Building great relationships is a huge part of what makes college transformative, and they will stay with you for the rest of your life. My philosophy has always been that if you don't like something, you can leave later. But you can never go back in time and join retroactively, so sign up for everything. There is an incredible amount of knowledge passed down through pre-professional clubs - I have many relevant soft skills from such clubs that I could never learn from classes.
3) Cold-email a lot of professionals. The most powerful email address in the world is not the one that ends in @whitehouse.gov or @goldmansachs.com. It’s the one that ends in ‘.edu’. People love talking about themselves to students and you have a very limited amount of time to soak all of it up and meet as many interesting professionals as you can. I am surprised by how many high-level people who I thought would have no time for me are willing to find 15-20 mins to tell me about their life and work. And through them, I have had opportunities I otherwise have no business having.
4) Soak it in. Do drunches (the NYU term for bottomless brunches), play spike ball at the park, and ask that person out on a date. You'll never be 20-something years old again by yourself in a little oasis full of other 20-something-year-olds doing whatever you want. So make the most of it. Not to mention - our country is suffering from a loneliness epidemic (and a low fertility epidemic) so if anything, you’re serving our country out there.
5) Find your people. My fondest memories were sometimes the most boring places with the right people. Make one or two really good friends that are down for anything. Be as spontaneous as you can be, the stupider the idea the better. Watch a lot of sunsets, watch a few sunrises. Say no as little as possible, money is replaceable but you’ll never be 18-21 again. Take a lot of pauses to appreciate the absurdity of the freedom you have just living your every day in your first taste of adulthood. The right people become your Board of Directors who will support you through challenges and give you calculated confidence when taking a risk. The right people aren’t blind cheerleaders who encourage you to do whatever your heart desires, instead, they call you out and hold you accountable to your highest potential.
food for thought,
shreyas sinha
*I’m not the first to coin this phrase; it can likely be attributed to Obama’s Education Secretary John B. King.
**Also not the first to coin this phrase; it was popularized by motivational speaker Dan Peña
P.S. Email me at shreyas.sinha12@gmail.com, or call/text me at 603-809-7376 with your thoughts! And share this post with three friends you will enjoy it.
P.S.S. Have questions about the debt ceiling? New full-explainer video coming out soon, send me any questions you have!