Straight Talk from Al Jacobs

 

STUDENT DEBT IS A WASTE

 

A recent headline is ominous: “Student Loan Debt Now Mammoth.” A majority of undergrads are taking on debt to attend college, some of it massive. Examples of students’ financial misfortunes are described, but it’s the article’s final sentence that leaves me confused: “The big question now is what, if anything, we can do about it.”

 

I’m not certain who we are. Am I, a self-financed graduate, one of we? Are parents who paid for their children’s schooling part of we? More specifically, why should the collective we do anything about it when a college education is for the direct benefit of a specific recipient? This is a problem for the student and family to resolve, not we.

 

Now that I’ve disavowed all personal responsibility for educating millions of people I don’t know, I’ll explain how each student can earn a diploma without going into hock. I subscribe to the principle of college-on-the-cheap. The first two years of post-secondary education, the freshman and sophomore years, are pursued at a local community college. The next two years, as a junior and senior, are earned at a state university. Tuition charges vary with each state, but legal residents generally enjoy low preferential rates. The annual tuition for a full academic load at the California State University system is currently in the range of $6,600 plus about $800 in various fees.

 

I’m convinced that two years at a local community college followed by the junior and senior years at a reasonably priced state university is the way to go. This is because scholastic benefit depends more upon the student’s efforts than anything else. I’ll share my personal bias with you. Unless you or your parents have more money than you know what to do with, attendance at an acclaimed university represents an unwarranted expense. The time will come when your textbooks have been sold, your course notes burned, the names of your instructors forgotten, and your framed diploma relegated to a wall at which you rarely glance. At that point your education is what’s left in your head. That’s what really counts.

As a final thought, I disagree with those critics who contend that a degree from an institution without an exalted reputation will forever stigmatize its holder. To you, I pose this question: Do you actually know from what schools your dentist, attorney, accountant, and physician received their bachelors’ degrees?

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com