Category Archives: Money

How to Graduate College Debt Free

Disclosure

In full disclosure let me start this post by saying I did not graduate college debt free. I didn’t learn this stuff until it was too late. The advice I’m about to give you is the advice I wish I would have been given in high school.

You don’t need to follow the herd. You’re not a sheep. Break out of the mold. A lifetime of student loan debt is not mandatory for a successful career.  I want you to be fully informed so that you can make the best possible choices for your future. So here goes, 3 simple ways to graduate debt free.

InsanityMoney

Student loan debt is a real problem. It’s crazy. It’s out of control. At 18 years of age I had no business taking out tens of thousands of dollars going into debt for a private college education I really couldn’t afford. But this is happening every day to a bunch of people across the country.

Close your eyes and imagine this scenario with me (wait, you’re reading this, so don’t close your eyes… just imagine).

An 18 year old guy walks into a bank and asks for a loan, we’ll call him Jimmy.

Jimmy: Hello Mr. Banker, I’d like to borrow some money.

Banker: Alright, how much would you like to take out?

Jimmy: Hmmm…. how about $75,000?

Banker: Okay, let’s see what we can do for you.  Do you have a job?

Jimmy: Nope.

Banker: Do you have any assets?

Jimmy: Nope.

 Banker: Do you have a high credit score?

Jimmy: Maybe, what’s a credit score?

Banker: Well Jimmy, a credit score is a 3 digit number generated by a mathematical algorithm using information from your credit report. It helps us predict risk and determine the likelihood that you will be able to fulfill your credit obligations and pay back your debt.

Jimmy: Oh. Then no, no I don’t.

Banker: Okay Jimmy, let me just run some numbers here…. alright finished. Congratulations Jimmy! You’re approved.

Absurd, right? Of course you wouldn’t loan some 18 year old bum with no job, no assets, and no credit score that kind of money.  But it happens every day, and it’s called student loans.

With massive amounts of students taking on massive amounts of debts each year, it’s no wonder we’re in the midst of a student loan crisis. Our nation currently has over 1 trillion dollars in outstanding student loan debt. That is a lot of money. Now combine that with the fact that the cost of college is consistently increasing way beyond normal inflation rates and hopefully you’re starting to understand the gravity of the situation.

Student loans are becoming a rather large problem.

Graduating College Debt Free

So what can we do about it? More importantly, what can you do about it? Well, let me make three simple suggestions on how you can make a stand against student loans and graduate debt free or at least with significantly less debt than most.

 

1. Selection

Where you go to college is important. A lot of people are willing to enter into a life time of debt all for the sake of going to a prestigious university. Let’s be real. You’re not rich (yet) and it’s not worth it. Go to a college you can afford.

Trust me.

It might not be as glamorous, but employers don’t care where you went; plus what’s more glamorous than not being broke and having to live in your parents’ basement after graduation?

2. Work

Work is good. Having a job in college will not cause you flunk out. In fact, the opposite is more likely to be true. A study done in 2012 by the United States Bureau of Labor Statistics found that students who worked up to 20 hours a week got better grades than students who did not work at all.

College is not adolescence continued. It’s a new chapter in your life.  The college experience is not a transition into adulthood, it is adulthood. It’s time to grow up.  Working is a part of adulthood, therefore work should be a part of the college experience.

Working in college will help you with developing a consistent schedule and it will teach you incredibly important things like balance, time management, prioritization, and other real world skills.

But, in this post we are talking about graduating debt free, so let’s not forget the fact that working throughout college will significantly lower the amount of aid you will need. Just pretend that free loan money was not available to you and that working was your only option.

3. Scholarships

While you are still in high school scholarships, should be your main focus. Treat scholarship searching like a part-time time job. Spending just 10 hours a week completing scholarships could yield a whole lot more money than working at the local fast food restaurant. During summer vacation kick it up a notch. Work on scholarships 20 hours a week and that still leaves you plenty of time for volunteering, vacations, or working.

Just a quick example of how working on scholarships can easily pay more than a summer job…

A student working 20 hours a week for 10 weeks (average summer vacation) at $7.50 an hour will make approximately $1,500 over the course of the summer. (20 x 7.5 x 10 = $1,500)

A student working 20 hours a week for 10 weeks could easily complete 40 (or more) scholarship applications. If the student was awarded only 10% of those scholarships and if those scholarships were a modest $1000 each the student would make $4,000 over the summer.

This example is a very conservative example. With that amount of time the student could have easily looked up a lot of high potential scholarships and devoted a lot of effort into them. Remember, scholarships can range from $100 up to a full ride. If you spent your whole summer working on scholarships and could earn a full ride, you would be making considerably more than a part-time fast food job.

There are a lot of other unique and creative ways to avoid racking up big student loans, share your ideas below.

 

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Why Being a Poser will leave you Broke

Honesty

Can we be really honest for just a minute? I have a question for you.

Are you a poser?

I’m guessing most of you know what a poser is, but if not, here’s what Google says…

Poser

Posers

So by Google’s definition, I’m guessing we’re all posers from time to time. Honestly, who doesn’t try to use money to impress others in some way or another? We buy clothes that may be just a little out of our price range. We drive nicer cars than we can afford so we lease them or take out loans. We buy dinner for our friends knowing that it’s going hurt later. Heck, even our cell phones say something about our status so we pay whatever we have to for them even if it costs us an arm and a leg.

Impressing other people isn’t cheap.

Sometimes we even feel such a strong need to impress others that we do it at great financial harm to ourselves. Take college selection for example.

As students start looking at colleges and begin to decide where they want to go, they have to process a lot of important school information: location, transportation, degrees offered, tuition costs, room and board costs, financial aid packages, work opportunities, etc.

The Elusive Prestige

Of course these are all really important and really smart things to be thinking about. But here’s the deal, 18 year olds aren’t only thinking about those things. If you’re going to college soon, chances are you’re thinking about less tangible, less quantifiable things; things like the culture of the school, the “fun-factor”, and how prestigious the school is.

A lot of high school seniors (and their families especially) are really concerned about that last one; prestige. Again, we turn to Google…

Prestige

Prestige is really, really important to a lot of students and their families when choosing a college. It’s as if certain colleges seem to be able to offer a higher level of esteem, respect, and status to their graduates. Highly esteemed colleges produce better quality graduates that are more desirable in the marketplace, right?

Certainly if employers knew you went to one of these highly respected schools they would be much more likely to offer you a job over the common shmuck that went to the community college down the road, right… right?

Well, probably not.

Honestly, employers are really not all that concerned with where you went to college. There are of course some careers that are an exception to this rule, but they are certainly not the norm. The truth is after you graduate college the only person who cares about where you went to school is you.

“Only the Best” Mentality

You’ve probably heard that you have to get into the best possible school that you can. This is taught to students all the time from teachers, counselors, and family members. Let me be the first to tell you, It’s not true. It sounds great but its horrible advice.

Better advice would be that you have to get into the best possible school you can realistically afford and that offers the best return on investment.

Just because you get accept to a prestigious school doesn’t mean you can afford it. It also doesn’t mean you should take out a life time of student loans to go there.

You really have to think these things through.

The kindergarten teacher who graduated with $150,000 in student loans isn’t going to be getting paid any better than the teacher who graduated with $10,000 in student loans. Remember, the only person who cares where you went to school is you.

So before you decide to sign on the dotted line and agree to take out a massive student loan in order to get into that super cool school, think about your motives. Who are you really trying to impress? Is their brief and passing admiration worth it? How super cool will it be when you have to pay $600 a month in student loans until you’re 40? How prestigious will it be when you have to move back into your parent’s basement after graduation because you’re broke?

Think about it. That’s all I’m asking.

As a guy who graduated from a rather expensive private university with a degree in education, I feel like I have a pretty decent understanding of this whole idea of getting a good return on investment for a college degree. I learned the hard way though. I spent too much plain and simple. I didn’t learn that until years later though.

So tell me your story. I’d love to hear your thoughts on this issue. Comment below to share.

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The Most Expensive Degree Ever

48%

The Most Expensive Degree

Do you know what the most expensive degree you can get is? I’ll give you a hint, it isn’t medicine. No, it isn’t law either. Fine, I’ll give you another hint; it’s one of the most common degrees in America; in fact, 48% of all college graduates have this type of degree.

Give up?

Okay here it is. The most expensive degree is…

(Drumroll please)

…the degree you don’t use.

That’s right; the degree you don’t use is the just about the most expensive degree you can get.  I recently read an article on Forbes that stated that 48% of bachelor level college grads in the U.S. are working in jobs that don’t even require a four year degree. That’s almost half of all college graduates that went to college and got a degree only to ignore it completely.

It makes sense though.

At 18, high school students are being ushered into the higher education system with very unclear plans for their future. Honestly, how much time do you think most students get to spend with their guidance counselor?

How much did you spend with one?

Have a Plan

A lot of young adults are getting ready to head off to college without knowing what they want to do.  They are going because it’s the path of least resistance or maybe they are going because they’ve been told it’s the key to success. They are kind of right. A degree is important, but it’s not the key to success it’s a key to success, and it’s only a key to success if it aligns with your passions and your talents and if you have thought of a feasible way to make money using the degree after you get it.

You don’t want to be one of the 48% of graduates who spent 4 years and a boat load of money on a degree you aren’t going to use.  Have a plan in place. Identify your passions and talents. Choose a degree that is necessary to get you to where you want to be. Spend some time thinking about what you want to be doing with your life before you start filling out college apps.

There’s no such thing as too early to start planning for your future.

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Should I Live at Home or on Campus?

Home vs Dorm

To Dorm or not to Dorm, that is the Question

So you’re going to a local college. It’s close enough to live from home, but you could also live on campus if you wanted to. This is your first chance to live independently. Should you take it? You’ve been sleeping in the same room since you were 2 and now’s your chance to finally get out on your own. Living in a dorm is at the heart of the college experience. It’s where life-long friendships are made and world renowned fun times are waiting to be had. Yes, it’s going to be expensive but it’s all part of the college experience right?

But wait.

On second thought, do you really have to move out? Your room is nice. It’s free. It’s bigger than a large closet. It has carpet that isn’t just 9 different shades of stains. It’s yours. It already has all your stuff in it. It has a fully stocked kitchen at the bottom of the stairs. The laundry machine doesn’t take quarters. It doesn’t sound like a rock concert 24/7.  Oh, and did I mention it’s free?

Pros and Cons

Now you’re faced with a tough decision, “should I live at home and save a few bucks, or should I live in the dorms and get the full college experience?” Let’s look at the pros and cons of each.

Living in the Dorms

Pros:Dorms

Convenience: When you live on campus you can walk to classes, cafeterias, computer labs, libraries, and any other buildings you might need to go to. There’s no driving time or worrying about a vehicle.

Ease: Living on campus is very easy. You don’t have to worry about the bills. You don’t have to worry about utilities, rent, or grocery shopping. Everything is taken care of for you.

Social life: Living in the dorm is a great way to make new friends. You will be constantly surrounded with other people your age and will have a lot of opportunities to meet new people and establish new friendships.

Exposure: Living on campus will bring about a new level of exposure and will enable you to learn from people who come from different walks of life. Being surrounded by so many new people can provide opportunities to make valuable connections and learn new interests and passions.

Cons:

Less Privacy: If you like having time to yourself and need a lot of personal space, then living in the dorms can be a real challenge. You will have to share your bedroom, your bathroom, and your living spaces. There will be almost no privacy.

Small Rooms: You’re dorm room probably won’t be nearly as nice as your bedroom at home. Dorm rooms are usually tiny and you will have to really limit what you keep with you at college.  You may have to buy new (smaller) furniture to be able to live in your dorm.

Difficulty Studying: The huge increase in social activities and being constantly surrounded by friends can often force high achieving students to lose their academic edge. Some student’s grades drop dramatically due to difficulty focusing and not being able to personally enforce good study habits among the distractions.

Exposure: You cannot control your environment when living on campus. You may find yourself constantly surrounded by people with drastically different world-views than your own. Dorms are often full of activities that may go against your beliefs or that might make you feel uncomfortable.

Costs: Living in the dormitory can be expensive. This cost is usually wrapped up with the student’s loans and it’s easy to forget about them. Living at home is much, much cheaper.

Living at Home

Pros:Home

Independence: Living at home doesn’t always mean less independence. A lot of dorms have strict rules that students must live by while living on-campus. These rules are nonnegotiable. Living at home allows you to establish those rules with your parents. You can be a part of the discussion on how to best increase your independence as you transition from high school to college.

Increased Privacy: Living at home can provide greater levels of privacy. Chances are you won’t be constantly surrounded by other students at home. Chances are there won’t be parties 24/7 either.

Improved Grades: When you live at home you will be studying in the same environment that you did in high school. It will be a very smooth transition. There are a lot less distractions at home and you can have a greater amount of control over what distractions you allow in your life.

Social Life: When you live at home you can still have a great social life, and as a bonus benefit, you can have it on your own terms. Living at home allows you to go out and engage in social activities with friends and then take a break when you need to focus on your studies.

Control: Living at home allows for a greater amount of control of your surroundings. If you don’t like a situation on campus or feel uncomfortable, you can easily remove yourself from that situation. You also can choose the types of people you will surround yourself; and as you know, people tend to become like those they surround themselves with.

Costs: Living at home is cheap if not free. Who doesn’t like free?

 Cons:

Independence: You may feel like staying home during college is cheating you of a valuable experience. It is easy to feel like you aren’t really living independently while living at home.

Transportation: Driving to and from school takes up time. It also costs money and requires that you have a reliable vehicle or mode of transportation.

Isolation: Developing connections is an important benefit of attending college. If you tend to isolate you may miss out on some important connections living at home.  But remember, you don’t need to become a party animal. Being an introvert is not a bad thing.

Decisions

It’s a really big decision, but like most decisions it isn’t just option A versus option B.  You have more options than choosing between the college-experience or saving money. There are a ton of different options.

Maybe you will…

  • Live at home for a couple years and then finish on campus.
  • Live at home, but spend the majority of your time studying on campus.
  • Live on campus, but go home on the weekends to be alone or catch up on projects.

Don’t Forget

You need to remember why you’re going to college. Is it to make friends and live it up? Do you really need to pay for that experience? If you think about it that way it sounds kind of lame doesn’t it. But, that’s exactly why a lot of students decide to live on campus, so they can make new friends be a part of the scene. Imagine that scenario outside of the whole college experience mentality. “Can I give you a bunch my money and in return you let me hang out with you and go to cool parties?” Lame.

What would you do with an extra $30,000 at your college graduation? If you can save room and board fees of $7,500 a year over four years you have a nice chunk of change at graduation.

As someone who lived at home, on campus, and in my own apartment during college, I can say without hesitation that living at home is by far the most cost effective and easiest. My social life wasn’t hurt in the slightest by living at home and I was able to give my full attention to my studies. Dorms are expensive. Apartments are even more expensive.  Home is free.

If cost isn’t an issue for you and you really feel the need to live on campus, then go for it and enjoy. But, whatever you end up choosing make sure you choose it because it is what’s best for you.  Don’t simply take the path of least resistance. Don’t follow along blindly doing what everyone else is doing. Figure out what you need to do to get you where you want to be and do it. Be creative, remember normal is mountains of student debt and a degree you probably won’t use.

Don’t be normal.

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Free College

How would you like to go to college for free? No, I’m not talking about getting a full ride athletic or academic scholarship. I’m also not talking about college being free to you thanks to mom and dad’s 529 college savings plan. I’m most definitely not talking about college being free today thanks to student loan debts tomorrow.  I’m talking about going to a four year accredited university completely tuition free.Free College

Free college.

 It sounds mythical, almost like a fairy tale doesn’t it? Unicorns, leprechaun’s gold, big-foot, cold fusion, free college.  The words free and college shouldn’t even be able to coexist in the same sentence.  But, with the cost of a college education rising at over twice the rate of inflation, it’s seems like a pretty reasonable thing to look into. 

As a side note I will be sharing how to find a leprechaun’s pot of gold in a future post.

College of the Ozarks

Back to getting a free college education. Although it sounds too good to be true, there are a few accredited colleges that are completely free to students. Really, there are.  For example the College of the Ozarks offers a four year education at no cost to their students.  This excerpt from their site explains it pretty well.

“Each student participates in the on-campus work program for 15 hours per week and two forty-hour work weeks. Earnings from participation in the work program, plus any federal and/or state aid for which students qualify, plus a College of the Ozarks Cost of Education Scholarship combine to meet each student’s full tuition charge.”

Or if you’re a visual person, it breaks down like this:

Cost of Education: $17,900
College of Ozark Work program: -$4,116
College of Ozark Cost of Education Scholarship: -$13,784

Total Cost to Student: $0.00

Curtis Institute of Music

Another college, the Curtis Institutes of Music also comes at no cost to the student. Here is what they have to say:

“Since 1928 Curtis has maintained an all-scholarship policy. The Curtis Institute of Music provides merit-based full-tuition scholarships to all undergraduate and graduate, students, regardless of their financial situation. For the 2013-14 school year, the annual value of this scholarship was $37,600 for undergraduate students and $50,100 for graduate students. These scholarships are renewed each year of a student’s enrollment. No financial aid application is required for the full-tuition scholarship.”

Berea

Berea is yet another example of a college offering a free education. All individuals admitted to Berea get a full four year tuition scholarship. According to their website, for most students, the 4-year tuition scholarship amounts to nearly $100,000.  How do they do it?

We are able to provide this level of financial assistance due to the generous support of alumni, friends, organizations, and others who believe, as we do, that a student’s income should not dictate their outcome. So when you enroll at Berea, your scholarship will be provided by people you don’t even know who believe in your potential—and who know that Berea is well-positioned to help you realize that potential.”

 These colleges are not alone. There are others that offer similar deals to their students. Is this the norm? Definitely not!  To be honest, it can be very difficult to get into some of these colleges. Curtis is an exceptionally elite school. Berea and Ozarks also have very limited availability.  But there are other options available for a free education.

 West Point and other military academies offer tuition free education; however, you do have a required period of service following graduation.  Here are some other examples of tuition free colleges:

Alice Lloyd College
Webb Institute
Deep Springs College

College doesn’t have to be a massive financial burden to you. There are ways to go to college without taking on a ton of student loan debt. Time spent looking into alternatives is not time wasted.

 

 

 

 

 

 

 

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Stupid Degrees

Benjamin Franklin once said “The only thing that is more expensive than education is ignorance.” The thing is, Ben probably wasn’t talking about a degree in puppetry. You see, not all education is equal. 

Puppetry

The University of Connecticut offers both Bachelor’s and Master’s degrees in Puppetry.

Just because you spend tens of thousands of dollars earning a degree doesn’t mean you are instantly valuable in the marketplace. I’m sorry but the only thing you’re going to be able to do with a degree in European medieval history is teach European medieval history, that or work at Starbucks.

It’s unbelievable the majors some colleges offer, for example:

Pop culture – Bowling Green State University (Hipsters need not apply-too mainstream)

Adventure Education – Plymouth State University (wha!?)

Canadian Studies
– Duke (again… wha!?)


Floral Management
– Mississippi State University (pretty flowers go in the vase 101)


The Beatles
– Liverpool Hope University (I love the Beatles, and now I’ve got a degree to prove it…)


Puppetry
– University of Connecticut (Sesame Street here I come! Wait, your not hiring… uh oh.)


Comedy
– Humber College (either you got it or you don’t…have you ever asked to see a comedians resume?)


Nannying
– Sullivan University (with an average annual income of $19,190 in the state of Indiana i’m thinking a degree might not be necessary)

Before you spend a fortune on a degree you need to have an economic model in place to earn an income. Make sure that economic model fits your life plan as well.

One of the podcast I listen to from time to time is the Dave Ramesy Show. The following clip is from his radio show and it is about this exact subject. Sometimes Dave gets a little worked up and this is one of those times.

Enjoy.

Please leave me a comment and let me know what you think.

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Rachel Cruze on College Debt

Overwhelming college debt is an epidemic problem. Students are taking out massive debt to go to college, often without even having a plan in place to pay it off. This is nothing new, but the problem is not moving in the right direction.  College costs are increasing at a rate that is disproportionately higher than general cost of living increases. College is great. College + crippling debt is bad. What are you going to do?

Rachel Cruze shares what I think is an excellent plan.

Common sense.

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Money: How Much Do You Want?

Money

Money is important.

That’s right, captain obvious to the rescue. But seriously, money is important. It took me a long time to come to that realization. Some of you may be thinking, “What is this guy talking about?” others of you will get what I’m trying to say.

I remember when I was in high school there were basically three mindsets about money among my friends. At this point I should probably give a little background information to paint a better picture of who we were. My friends and I were the high achievers and we did pretty well in school. We took all of the AP and college prep classes. We did a lot of extracurricular academic activities. We were the good kids.  We were the smart kids- kind of. We also had wildly different opinions with regards to money and the future, but basically we all fit into one of these three categories.

  1. “Money is da-Bomb!” (yes, we actually used to say that)
  2. “Money’s for sell-outs and tools; follow your heart!”
  3. “Money, um… I dunno.

Maybe you fit into one of these categories too.

In high school I happened to fall into the second category. Follow your heart and forget about the money. It seems like the most decent of the three doesn’t it. I certainly thought so and I didn’t hesitate to let everyone else know that it indeed was the noblest way to look at things. As I mentioned here, when I was planning my future career path, I took money out of the equation and chose to do what I felt passionate about: teaching and eventually social services. The problem was I didn’t really have an economic model in place to fit the lifestyle I was hoping to live.

It took me a long time to realize that.

It took me even longer to realize that it is okay to make money.

Again, some of you are thinking, “What in the world?” Others are nodding their heads in agreement. That’s okay, stick with me.

Have you discovered your passion, recognized your talents and found that you want to get involved in a traditionally low income vocation such as teaching, social services, or counseling?  Great!  You’ve done the hard work of looking inward. Now you get to do the fun stuff and look outward.

Teachers

At this point you need to realistically decide how much money you want to make. Don’t you dare say “I want to make $30,000 a year because that is what teachers in my area make.” If you start doing that you are not being honest with yourself. I know this because this was me.  If you’ve been honest with yourself thus far, trying to figure out your passions and your talents, why lie to yourself in this area? Now you’re thinking, “I’m not doing this for the money!” Again, this was me. I thought that if I made money doing something it would take away from the fact that I was trying to help and serve others.

If you are struggling with this concept I highly recommend studying the principles of Rabbi Daniel Lapin in his book, Thou Shall Prosper: Ten Commandments for Making Money.   Rabbi Lapin states that people often fail to reach their financial goals and potential due to a belief that money is materialistic and an unfortunate necessity. He proposes a change in mindset. He calls money a certificate of appreciation. He proposes that you look at the receiving of money as proof of your excellent service to others and not that you are simply taking their money.

Be creative; look for nontraditional career choices or consider going into business for yourself. Just because you want to work with kids doesn’t mean that being a school teacher is your only option.

At this point in the planning process don’t ignore your financial desires.  Ignore money and you won’t have any to worry about!

What are your thoughts on money? Is it something you are considering while trying to decide what field to get into? Is it the main thing? Do you think that prospering financially in your career is a sign that you are serving others extraordinarily well? I’d love to hear your thoughts on this subject.

Remember:

A fulfilling and profitable vocation is made up of three things: passion, talent, and an economic model.

Your economic model is one part of a three legged stool. If you don’t spend the time needed to figure it out the other two won’t hold you up.

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Opportunity Costs for Going to College

Image

Going to College is expensive. I know, everybody is yelling “well duh!” in unison. But it’s even more expensive than you might think. Opportunity costs are very important to consider when planning whether or not to go to college.

Let me quickly define what I mean by opportunity costs for the purposes of this article. An opportunity cost is simply a choice between two possible options where you judge the benefits of one choice over the other.  You can choose to do this or you can choose to do that. You can buy a 1998 Chevy Cavalier or you can buy a new 2012 Toyota Prius. You can have cereal for breakfast or you can have oatmeal. You can choose to go straight to the work force after high school or you can choose to go to college.

Let’s look at the workforce or college example in more detail.

A lot of people when taking into account the financial implications of going to college only consider the debt they accrue while attending college; room and board, books, fees, tuition, etc.  They often don’t consider one of the biggest financial factors in the whole equation which is the cost of giving up four years of income to attend college. Four years of income will often add up to more than the total cost of tuition and all the related expenses. Four years income is a big chunk of money.

For example; we have two students who are graduating high school. One decides that he will go straight to the work force and the other decides to go to a four year college.  The student who chose to go to college will pay, or more likely owe, $71,440 when starting his or her career. But not only that, they will also be out an additional $120,000 in lost income. The $120,000 sounds like a lot but it is really pretty conservative, just take $30,000 a year multiplied by four years.  So college for that student came at a $191,440 cost of opportunity. At 22 years old after graduating college that student is down $191,440; let that sink in for a minute.

Now we move on to our student who chose to go straight to work after high school. Let’s say he or she chose to become an auto mechanic. The average salary for that job is $36,180. Multiply that by four years and at 22 years old that student is in the positive $144,720. That is a difference of $336,160 between the two. That’s a lot of money!

I want to be clear that I am not discouraging going to college at all. In general, college graduates earn more than high school graduates do. The unemployment rate is lower for college graduates than it is for high school graduates. Going to college is a must for a lot of career paths and it tends to provide more flexibility.  However, as I mentioned earlier, it is important to understand the opportunity costs. Make the decision from a position of knowledge and confidence.

Ask yourself; “Is accepting that cost necessary to get me to the place I want to be?” or more simply put, “is it worth it?”

As a side note, $71,440 is the average cost of a four year in state college based on data from College Board located here http://trends.collegeboard.org/college-pricing/figures-tables/average-published-undergraduate-charges-sector-2012-13. Check it out.

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