COLLEGE ON THE CHEAP

With the 2016 elections in full swing, it’s time for the candidates to propose the traditional raids on the federal treasury.  In emulation of Franklin Roosevelt’s 1936 New Deal, Lyndon Johnson’s 1964 Medicaid and George Bush’s 2004 Part D Medicare, the Democratic presidential frontrunner Hillary Clinton advocates a $350 billion 10-year plan to make college education more affordable.

It’s true that attaining a college degree can cost a fortune.  Room, board, fees and tuition at Northwestern University in Evanston, Illinois, now runs $62,500 per year.  If you prefer Duke U, Durham, N.C., plan to fork out $67,650.  And for this, after four years, you get a diploma which may or may not entitle you to a job.  Richard Vedder, an Ohio University economist and expert on college costs declared: “Colleges and universities may be the least cost-effective institutions in the United States.”

So what will throwing another $350 billion at the schools accomplish?  If history is any guide, colleges will simply raise tuition costs.  There’s nothing unusual about this; the third-payer system in effect in health care over the years is further evidence that as the money supply increases, the cost of the service goes up to match it.

As with most financial problems, the solution is not to be found in a government program. It’s the individual whose money is at stake that must craft the remedy.  In this case, a suitable method is already available.  The student does not attend an overpriced ivory tower.  While living at home, spend your freshman and sophomore years at a local community college; as a junior and senior attend a convenient state university.  Summer jobs may generate enough money that, by living on the cheap, you can avoid student loans, for going into debt is a killer. 

You’ll be told a degree not earned at an exalted university is inferior and stigmatizes the recipient.  That’s bunk!  For the motivated student, the route I suggest provides as fine an education as four years at Harvard or Princeton.  Scholastic benefit is dependent upon the student’s effort, not the credentials of the faculty or the attractiveness of the campus.  Without a doubt, spending a bundle you don’t have on an expensive school makes as little sense as “Zero to sixty in three seconds.”

                                                        ♦          ♦          ♦          ♦          ♦

 In addition to this Straight Talk by Al Jacobs, I’m now generating a monthly Financial Newsletter.  It normally appears the first of each month and may be viewed on my website.  Click onto http://www.onthemoneytrail.net/