By Dan Danford
Family Investment Center
Michelle Singletary's column often preaches against debt. Any kind of debt. She's a product of her upbringing by a conservative grandmother who saw the ravages of the Great Depression.
I sometimes agree with her - but this latest column has me steamed.
She suggests in her column that it is not worth the debt to get a college degree.
Here's what she asserts:
I hate it when people say a student loan is good debt. There is no such thing as good debt. There is only debt. With that in mind, of course I side with the growing number of experts who are boldly arguing that racking up a lot of debt for college isn't such a great investment after all.
Totally absurd and irresponsible. Education is a good value, no matter how you get it. (And, incidentally, not all debt is bad.)
Having said that, you should use your head before borrowing for school or anything else. If you are going to be a teacher (noble, but not necessarily high paying), choose a college you can afford. Many regional or community colleges offer tremendous value and you'll get every penny back from the education investment you make.
On the other hand, an Ivy League school may not be the best choice for an education degree, especially if you have to borrow $200,000 to attend there. Probably shouldn't borrow $200,000 to satisfy your or your parents' ego, either.
This kind of column just makes me cringe. Education isn't a product, it's a life-time process. You don't earn a job along with your diploma, and - even if you did - smart people wouldn't spend $200,000 for a $30,000 per year job. Who makes that kind of decision? Where were the parents and school counselors, and financial aid advisors? And journalists, for that matter?
Of course, it's worth borrowing to get an education if that's the only way your can afford it. All the studies say so and millions of us prove the case. Don't let a few anecdotal stories lead you astray. Just use your head.
http://www.washingtonpost.com/wp-dyn/content/article/2010/08/19/AR2010081902753.html
Perhaps some data would enlighten this "analyst."
ReplyDeleteAccording to the U.S. Census Bureau, based on census data from 2000, the best researchers in the country could only identify ONE(1) variable that was a consistent predictor of a person's lifetime earnings - EDUCATIONAL ATTAINMENT.
We are talking MILLIONS of salary dollars. In round numbers, over a 40-year working career, here is the summary of what the Census researchers found:
The average worker with a BS degree will earn a total of approximately $1 million more over their working lifetime than someone with a Diploma or GED...
The average worker with a Masters degree will earn a total of approximately $850,000 more over their working lifetime than someone with a BS degree...
the average worker with a Ph.D. degree will earn a total of approximately $1 million more over their working lifetime than someone with a Masters degree...
And finally, the average worker with a Professional degree (Law, Medicine, Engineering, etc.) will earn a total of approximately $1 million more over their working lifetime than someone with a Ph.D....
YES, IT IS JUST THAT SIMPLE!!!!
Do you really want to goose your earning power? Earn a recognized professional credential or two to go with that advanced degree. You only limits are the ones placed on yourself!
JTW