Opinion

Felix Salmon

The no-college option

By Felix Salmon
January 4, 2010

What are the chances that James Altucher won’t send his daughters to college? Roughly zero, is my guess. Yes, it’s expensive, and yes, it’s possible to make more money as an entrepreneur than as an employee. But only a small minority of people will ever have the necessary skillset to thrive in a business they founded. And many of those will actually go to college in an attempt to acquire that skillset. In any case, the point is that the option value of a college degree is enormous: it gives you potential entry into thousands of careers (including blogging for Reuters) which would otherwise be off-limits.

Altucher is right that college is largely wasted on those who don’t graduate — but that is unlikely to apply to his middle-class daughters, as failure to graduate is highly correlated with being poor. He’s also right that there are other things that can be usefully done with the money which would otherwise be spent on going to college, although I’m not sure that putting it all in a savings account would be top of my list. But he completely ignores the compelling non-financial reasons why people go to college, including the fact that for any given income, a college graduate is likely to be happier in their work (and life) than a non-graduate.

It’s just as well that lots of people go to college for non-financial reasons: collectively, a well-educated population is much more productive, and such countries become much more prosperous as a result. A few entrepreneurial free-riders here and there are fine, but they have to be in the minority.

The US has big problems with its colleges, and they need to be fixed. Let’s not kid ourselves that avoiding going to college entirely is a remotely sensible or scalable solution.

Comments
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Felix Salmon writes: “including the fact that for any given income, a college graduate is likely to be happier in their work (and life) than a non-graduate.”

This is a fact? Like, if I went to college and took a class about why going to college is great they would teach me this “fact”?

I would think a young person in their early 20s would be happier with an extra $300k in their pockets (income + opportunity cost). Maybe at that point they can decide to go to college on their own dime. Or not.
-James Altucher

Posted by jaltucher | Report as abusive
 

I wouldn’t confuse “college-educated” with “well-educated.” Especially nowadays.

If this college grad could do it all over again, he’d skip the ivied halls and learn a trade.

Posted by Mega | Report as abusive
 

The simple fact is that if you wish to engage in any number of a variety of professions, even as an entrepreneur, a college degree is often a minimal requirement. Try starting your own law firm without one.

“This is a fact? Like, if I went to college and took a class about why going to college is great they would teach me this “fact”?”

A large part of the value of a college degree is that it teaches people to think critically and learn. You won’t find such a class as described above. It’s debatable how well colleges do this, but that’s another issue.

“I would think a young person in their early 20s would be happier with an extra $300k in their pockets (income + opportunity cost).”

There are lower cost alternatives to private colleges. Consider SUNY, where tuition, fees and board at SUNY Albany come out to an annual rate of just under $17k. Even if snowflake takes a 5th year to “find themselves”, the opportunity cost isn’t that high. Save the money and encourage your kid to go to grad school.

Education is like getting keys- the more educated you are, the more keys you get. You may not use all the keys in your professional life, but you might not be able to open the one door you want without it.

Posted by drtomaso | Report as abusive
 

“I wouldn’t confuse “college-educated” with “well-educated.” Especially nowadays.”

As I said, it’s debatable how well colleges educate- but a discerning consumer with the drive to learn shouldn’t find this a problem. A lot of college is what you put into it.

I briefly taught undergrad computer science, during the heady dot-com days, and it was quite clear which students were there because mom and dad demanded it; which were there because they thought a CS degree was the path to riches; and which were there because they had a genuine interest in the subject.

This college grad’s biggest complaint is I didn’t do a 5-year MS program, and walked out on my PhD. I wasted an awful lot of time, and as a working professional, its been a struggle for me to go back. That said, my education opened incredibly rewarding doors for me.

Posted by drtomaso | Report as abusive
 

a college education is overrated; if one want to learn something, one learns better on their own than by trying to conform to a college curriculum…

skipping the college diversion didnt hurt bill gates, did it?

Posted by rjs0 | Report as abusive
 

“skipping the college diversion didnt hurt bill gates, did it?”

Don’t confuse good fortune with good decision. If not going to college was all it took to be Bill Gates, there would be a lot more of him.

Posted by drewbie | Report as abusive
 

Don’t confuse good connections with good fortune. IBM handed the contract for what would become MS-DOS to Microsoft, in part because IBM’s then president John Opel was a committee member on the United Way’s national board, along side Mary Maxwell Gates, the late mother of Bill Gates. She discussed her son’s company with Opel, and after discussing it with other IBM executives, the leading hardware manufacturer took a chance on the fledgling company.

Posted by drtomaso | Report as abusive
 

” ‘I would think a young person in their early 20s would be happier with an extra $300k in their pockets’ …
“Mr. Altucher received his BA at Cornell University and attended graduate school for computer science at Carnegie Mellon University.”

As a young person with some sense of what it’s actually like out there, I find arguments like this cynical and woefully solipsistic. Perhaps Mr. Altucher would donate that pocket change – that is, $300k each – to kids without college degrees and well-off parents who themselves possess several.

No? Ah. Well, then, as Jon Stewart might say: “Pehaps I can interest you in a nice hot cup of STFU?”

Second Mega’s point on the “well-educated” distinction. (It’s not too late to learn a trade if you’re so enamored of one, dude. Just don’t go applying for other people’s jobs with that ‘ivied hall’ pedigree.)

And agree w/ overall case here; but the “America’s Broken Promises” post seemed to me much stronger at getting to the heart of the problem. Fixing the education system (not cynically encouraging other people to abandon it) has to be job one. In the meanwhile, however – and it’s going to be a relatively long while – our society might begin trying to address these ‘degree inflation’ dynamics.

“Education is like getting keys- the more educated you are, the more keys you get. You may not use all the keys in your professional life, but you might not be able to open the one door you want without it.”

The distribution of those keys has gotten significantly less egalitarian and merit-based over recent decades. At the same time, the possession of one guarantees little if anything about the actual quality of graduates, or their comparative fitness for most entry-level jobs.

Posted by j657 | Report as abusive
 

There are colleges and then there are colleges.

Having been to both an enormous, state university vis-a-vis the US land grant model and a small, intimate, but pricey private college I can state without hesitation that the quality of the latter far outstrips the former. A school like Ohio State (I still shudder at the memory) cranks out a huge number of newly minted grads every June, but I dare say most of these people are no more educated than when they started four years earlier. If one wants proof, just look at the number of first class scientists, researchers and entrepreneurs that such a school produces. The number is quite small. OSU may have many first rate academics on its payroll, but they are not interested in teaching. They leave that to the overwhelmed graduate teaching assistants. And with a total student population in excess of 60,000, a student who encounters any sort of difficulty will be on his or her own. Don’t expect any help from faculty or staff. They simply don’t care. If you fail or drop out or party every weekend and scrape by with Cs and Ds it’s all the same to them.

Compare that to what one can expect at Oberlin or William & Mary or Amherst just to name three off the top of my head. If you put in the work they will meet you more than half-way. And, they don’t tolerate slacking off. If, for some reason you aren’t making it, they will let you know and suggest you take a year off and work for a while. That usually wakes a person right up.

My advice to anyone with the means is to stay away from any school with more than 10,000 students.

Posted by IntoTheTardis | Report as abusive
 

My own observations from working inside major US companies is that to be a first class citizen in the US, a masters degree is required.

A decent college degree is basically what a high school degree used to be, maybe 40 years ago.

Posted by AreaMan | Report as abusive
 

Its a simple fact of reality if you come from a wealthy family you go to college. If you come from a working class family you go to work. Why these poor parents are mortgaging their homes for college tuition, is beyond logical reasoning. Its like gambling. If the world is pushing college, then you may want to ask oneself why? The US is great at propaganda. I do not have college, my parents were immigrants from Hungary and Ireland, I have lived in CT, CO, and built a custom home in The Berkshires of Western Mass. all without a degree. A person does not need an institution or person to validate your intelligence. The fact is this and will always be this “Its not what you know, it is who you know” always remember that.

Posted by northeast | Report as abusive
 

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