Justin: Doug, I recently had an interesting conversation with my sister.
She told me that her financial advisor suggested she start setting aside $500 to $1,000 a month to pay for her son’s college education. That’s because a four-year college education is apparently going to cost between $400,000 and $500,000 18 years from now.
Her advisor clearly arrived at this figure based on how fast college tuition costs have been rising, which is about 6% per year based on my research.
But you have to wonder if the cost can keep rising at this rate. It seems to me that no one will go to college if it’s going to cost a half-million bucks.
What do you make of this trend?
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Doug: Well, the first thing—my advice to your sister is to get a new financial advisor. I fear that she’s relying on a complete imbecile. She should fire him immediately, and for a number of reasons.
Number one is his assumption that the trend of higher college costs is going to continue to a totally unaffordable level. In fact, the cost/benefit ratio of going to college is already so out of whack that the whole system has to change radically. A college degree, even now, is of only marginal value; most everybody has one. And things that everybody has are devalued. You’re quite correct that colleges and universities today are dead ducks as businesses. Unless you’re going to learn a trade, like doctoring or lawyering, or you’re going for science, engineering, or math, where you need the formal discipline and where you need lab courses, it’s a total misallocation, even a waste of money to go to college today.
So I applaud the fact that all these colleges and universities are dead men walking, that they’re all going to go bankrupt. They are totally overrun and infested with cultural Marxists and progressives, militant leftists that are propagandizing kids with absolutely the wrong kind of values. It’s astonishing that parents are willing to pay even today’s prices to subject their kids to four years of indoctrination. So I’m glad that they’re all going bankrupt.
Justin: But don’t you need a college education to get ahead in life?
Doug: It’s not necessary to go to college. You’re likely to be corrupted, and indebt yourself like an indentured servant for many years to come. The question is: Do you want an education, or do you just want a piece of paper that says you logged the time in a classroom? These are two different things. Getting an education is strictly a matter of motivation and self-discipline, not paying money to sit in a classroom. If you’ve got half a brain, you realize that you want the knowledge, not the diploma, and there’s no necessary correlation between them. Nobody can “give” you an education; it’s something you must gain for yourself.
Most top universities now have their courses online. You can get an education by listening to these courses. And even when you’re driving your car, you should be playing CDs by The Teaching Company. They have the best professors in the world giving command performance lectures. And you can hear them an unlimited number of times. This is much better than listening to some also-ran drone on, while you may have cut the class, or be half asleep, or not taking good notes.
Technology has changed the whole landscape of education. Its cost is approaching zero, not the stratosphere, as your sister’s advisor seems to think. If the kids insist on going to college and indenturing themselves, as well as cluttering their minds with irrelevancies and false data, then they should only consider, say, Harvard, or very few schools like it. At least there the prestige, and qualifications for admission, are so high that the connections they make may compensate for the many downsides.
And anyway, Ray Kurzweil’s right about the Singularity, in my opinion. And he’s upped the date to when it’s going to occur to 2029, which is only 12 years from now, at which point the whole world will have changed in ways that will change the nature of life itself. So forget about saving to send your kids to college; and that goes double for your grandkids.
Justin: I thought the same thing, Doug.
You see, my sister’s advisor suggested that she and her husband set up a 529 plan, which is basically a tax-friendly way to save money for college. I asked her what would happen to the money if her son didn’t go to college. She said she could use the money to pay her for grandchildren’s college education.
But, like you said, the world is going to be very different 12 years from now. Who knows what it’s going to look like 40 or 50 years from now?
Doug: Over the next generation the world is going to change totally and unrecognizably from the way it is right now. Technological change is compounding at an exponential rate. It’s always been exponential, quite frankly. Ever since the invention of fire. But we’re now in its later stages; it’s like a Saturn rocket taking off, very slowly at first, but constantly accelerating.
It’s going to be fascinating and fantastic to watch what happens over the next 20 years. And relying on, and paying for, today’s educational paradigm makes as much sense as entering a Model T Ford in the 24 Hours of Le Mans.
Justin: I agree 100%. We’re living in very exciting times.
Anyway, thank you for taking the time to speak with me, Doug. It was a pleasure, as always.
Doug: You’re welcome.
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I can’t see the future but I can predict that whatever we are dealing with 18 years from now will bear little relation to what we deal with today.
When the breaking point is hit, things break and get replaced by something else.
I concur. Never has “straight line” forecasting the past into the future been less likely to result in accuracy.
I think we’re headed for a phase change, a turn in conditions as stark as when water passes from liquid to solid over a tiny delta in temperature.
Today’s world is water. Fall in and get wet. Tomorrow I think will be like ice. Fall down and crack your skull open.
We are in a transitional period that is not very friendly to employees or self-employed, or the middle class.
While I have two STEM degrees (1971) I would not recommend much of engineering (I think Civil will be strong) or Comp Sci. These degrees have been good to me – but not anymore.
I agree much of college – a traditional system, has become a dinosaur. There is some value there, but not what it used to be.
I somewhat disagree with: “Getting an education is strictly a matter of motivation and self-discipline, not paying money to sit in a classroom. If you’ve got half a brain, you realize that you want the knowledge,”
If you want to really learn something you need a ‘lesson plan’ – maybe build on several courses. It’s hard to do this independently. Additionally, not many people could sit down, and devote the X hrs a day for Y months. It’s not like a 3 credit course is going to give you an education.
I can see higher education becoming more like community college – throw away all the useless electives and give the student a one or two year blast of condensed knowledge.
That would be a welcomed change.
Too many variables. A lot depends on the individual, whether a college degree is worth the cost or not.
I have a Ph.D., and use it in consulting. Clients want to know whether you are worth it, and the Ph.D. (and the accompanying ability to talk knowledgeably on the phone about various subjects) are the “foot in the door” that gets you started. Once you can show the client that you aren’t a fake or phony, the talks get serious. Finally, when you have to tell the client something they don’t want to hear / didn’t consider earlier, the Ph.D. can be what tips them over the edge to accept / at least investigate the alternative you are describing. But it’s the “knowledgeable” part that makes it happen, and the grad school STEM experience earns its’ way when you educate the client that recent developments / literature search information has outdated previous concepts.
One client’s supplier recently challenged me on a “corrosion / materials of construction” point. I sent the client a copy of a research journal article that I used for the recommendation: the client’s supplier was pleased to get that information, and thanked me for teaching them something new!
Anyway, YMMV; a Ph.D. can get you in the door, but you still have to sell your experience, education and abilities to get the project, and follow through even after the sale. If you do, however, you will beat 98% of all consultants who just sell once and don’t support afterwards, and the repeat business will keep you fed.
I agree with wandering James, who just happens to be a deplorable person. I am too, James (a deplorable person, that is). A college education and the subsequent diploma absolutely depends on the individual when determining whether college is a waste of time and money. For many it is. Sometimes however, a degree is necessary for a job. My son needed a biology major for his job. In fact, his job required a four year degree in one of only two majors. Of course his degree didn’t guarantee a job, as he was interviewed extensively, but it was a prerequisite, nonetheless.
After a BS and an MS, I had enough.
IMO, having a Ph.D generally does not add to your income potential. In your career, you managed to become a consultant – and in your field a Ph.D may be required. Sounds like you have been able to generate a steady stream of work.
Earlier in my career I worked for the DoD. There were quite few Ph.D’s in math, physics, etc, working as programmers, for a programmer wage.
Today, many people (younger) say: “you don’t need a degree to be a programmer.” Looking at the way some of this code is thrown together – it’s amazing it works. Well actually it doesn’t work well, or all the time. But some potential client’s would like me to ‘fix it’. Sorry – I tell them “I can’t make chicken salad out of chicken shit” – well in so many words 🙂
So there is a value to formal education – but we sure could get rid of the electives – like a mandatory course in a foreign language, or psych-1, or bio-1, etc.
My BS is in Engineering Mechanics. With all the science and math and statics / dynamics – I think engineering could be compressed into 3 years.
Two points. While it is true people do ‘learn’ better when they are being taught by an instructor who is physically with them that could be changing as video becomes high quality enough to give the same intimate feel as being in the classroom or with a tutor now does.
Second, if the above is realized then, other than courses that of necessity require lab work it is reasonable to envision the day when thousand of students do not have to descend on a physical campus to listen to a lecture by a instructor.
It is actually more likely that this trend will accelerate rather than reverse. That is always how it goes when dealing with exponential trends. That’s just the statistics of it. Collapses are quick; the exponential rise consumes a much larger portion of the timeframe. So then you have to ask, how the hell can college cost growth actually accelerate from here? And that’s simple. A financial crisis, followed by a round of money printing even more epic than any that have come before it. This will not end until 99% of people are drowning in hundreds of thousands in debt. Who knows, maybe the average debt tops one million in the not so distant future. All of that sounds far more believable than the idea that any of this crap is going to be cut back. Why would they? There is no pushback against them. No reason to stop. We have no functioning government. We are worse off now than in 1775, as far as tyranny and lack of representation goes. Not one single law gets passed unless it screws people. Have you seen one single person hanging from a bridge or a lamppost? THAT is how this stops. Until you are seeing bodies dangling in various places, or in burned heaps, on a daily basis, this does not stop.
“A college degree, even now, is of only marginal value; most everybody has one.” Not true. Roughly 1/3 of American adults have a bachelor’s degree. https://en.wikipedia.org/wiki/Educational_attainment_in_the_United_States
And a Bachelor’s degree today is roughly the educational equivalent of a High School diploma from fifty years ago.
People go back and forth on education and how useful it is in someone’s life. I received a STEM degree close to 20 years ago now and found the degree, for the most part, useless until going on to get a phd or expanding your field and getting an MBA. (its actually amusing how many MDs go back to get their MBAs) Our world went almost entirely to business and computers over these past 2 decades and I think it showed as I played rugby with several engineers that were out of their field and looking for work. Education is only as valuable as the job it can get you during that time period in the economy of a country. ( I am sure at some point all these communications, psych, women’s studies majors will have a flourishing job market /sarc )
The one thing that was great about STEM is that it forced application of theories and testing and this, in turn, teaches the student the same principles while out in the work force. From what I understand, however, many universities really restrict learning, even in STEM, to theory and have few, if any, courses that teach practical application which is all but useless to an employer of these “educated grads”. Bridging that gap between theory and application will always be the most important aspect of an education, but I dont think that even a pretty solid program could cover the costs of 400k per year of schooling. Much like the shifts in housing markets from owning to renting, I think the shifts from trade/labor to university schools is similar. At this time there is a huge need for these type of jobs. I would say that a flow into trade jobs would decrease cost, but much like health ins, a forced cost only causes an uptick in price.
I always figured a bank should have liability in loans for “education” and not a guarantee of repayment. Because loans are guaranteed “non-profit univ” up their costs continually and banks dole out the loans with no consideration of ability to pay. A liability would, obviously “kill” all the money these banks and “non-profit univ” rake in, but it would cull the output of useless degrees and more than likely also the indoctrination that goes on in these places of higher learning.
“many universities really restrict learning, even in STEM, to theory”
There was a video recently that was made at the graduation ceremony for MIT students. They were given a battery, a small light-bulb and a piece of wire and told “make the bulb light up”. They did not know how.
Classmates of my son, for their senior project for mechanical engineering, tried to put a generator driven by a wind turbine on the roof of a car in order to power the vehicle.
Wise words, Dutchman — everyone should heed them:
“If you want to really learn something you need a ‘lesson plan’ – maybe build on several courses. It’s hard to do this independently. Additionally, not many people could sit down, and devote the X hrs a day for Y months. It’s not like a 3 credit course is going to give you an education.”
“I can see higher education becoming more like community college – throw away all the useless electives and give the student a one or two year blast of condensed knowledge.”
My career has been in Compensation management. Over time, I became a highly-skilled job analyst, among other competencies. This means that I learned to analyze, describe and assess the knowledge, skills and abilities required to successfully perform many different jobs. What I have learned convinces me of the value of a structured, dedicated education. Specifically:
1. Learn to think clearly and logically
2. Learn to communicate clearly, logically and articulately
3. Learn core principles of recognized sciences, disciplines and professions. These will become the basis of the hard skills and competencies others will be willing to pay you for.
4. Master the knowledge, skills and competencies necessary to become and remain effective in your line of work — continue to learn, grow and build your hard skills. Effectiveness should always be your central focus. Efficiency is not a worthy goal unto itself — it is only valuable as a by-product of mastery. Do not settle for efficiency.
5. Learn and apply soft skills as you go along — hopefully, your personality will be an asset rather than a liability over time. Soft skills complement your competency in the hard skills of your chosen field – they can take you into management and sustain you in dealing with and managing others.
6. If you are only marginally competent at what you do, you will float along as a drone — some will like you, and that may help you get by at a relatively low level.
Wow, 2 of us from the same field! Excellent analysis and advice.
“If you want to get laid, go to college. If you want an education, go to the library.”
― Frank Zappa
For those looking to continue their education, there is an excellent free site supported by the Open University in UK:
https://www.futurelearn.com/courses/categories