| I graduated with honors from a top 10% university and it cost a heck of a lot more than $25k AND I've now been working for 3.5 years and I haven't hit the $80k mark yet. Only a small subset of the skills that I'm marketing right now did I learn in college. Furthermore, I'm doing better than a lot of my peers. Your numbers are suspect at best. $25k x 4 = $100,000 opportunity cost for college. $20k x 4 = $100,000 college debt load (if you're lucky). 8% over 10 years for interest payments = ~$45k. $245,000 total cost to go to school. If you figure a $55,000 starting salary after school and do $8,000 yearly increases because you're clever and smart, it will take you 4 complete years to make up the difference AND that's still assuming the same clever and smart person has been working without a degree for 8 years and is still only making $25k/year. (For the curious, the two cross path around $350k total salary earned) ALSO, that same clever and smart person could have been accruing a whole host of assets with the money they were making every year and could be well north of net worth $250k by the time the college grad gets to net worth $0. That clever and smart person with 8 years experience in the real world could use those assets to do all sorts of things our college grad is still going to have to wait some years to do. The financial benefit for a smart person going to school and not going to school, in my mind, is irrelevant. When you factor in opportunity cost and debt, that same smart person will have grayed the difference between a college grad and a non-college grad by the time the college grad gets to net worth $0. And as college tuition inflation continues to outpace all other expenditures in society, I would move more firmly into the drop-out camp. |
2) $25k x 4 is both high and low. It's low for 4 years at an expensive school, it is high for compared to going to a community college for 2 years and then graduating from more expensive 4 year place. My girlfriend went to a state school for a year and then a private school for 3, she definitely saved $15k in one year. That wasn't the plan at the outset but it was a result of the path she took.
3) 8% is way too high of an interest rate. Our loans are between 2 and 6.8%. I'm paying down the 6.8% fast, but at 2 or 3% it's almost free money once you include inflation and the tax rebate.
4) It shouldn't take 10 years to pay back
5) If you are making $25k and living outside of your parents house, you have no money left over to invest. Frankly the difference between $25k and $55k is the difference between sustaining yourself and building up wealth. No matter how frugal you are, it's nearly impossible to get ahead on $25k a year.