Debating the Affordability of an Undergraduate Degree

Published: Jul 06, 2015

Topics: Education Finance Grad School Job Search Technology Workplace Issues

With the cost of college and thus student loan debt rising to ridiculous levels, there are many who believe an undergraduate degree is no longer worth pursuing. And that includes the very wealthy and very well educated.

Take Peter Thiel, for example. Thiel is a big swinging PE investor and hedge fund manager who has two degrees from Stanford, co-founded PayPal, was Facebook’s first external investor, and, at latest count, is worth well over $1.5 billion. He also started something called the Thiel Foundation, “which awards grants to promising young entrepreneurs who are willing to skip college to start a business.”

And one of these young entrepreneurs is Dale Stephens, a college dropout and Thiel Foundation fellow who says there are three good reasons for dropping out of school, or not enrolling altogether.

Here’s ONE:

If you don’t know exactly what you want to do.
It’s almost ludicrous when you think about it. We expect teenagers to pick the thing they want to be their life’s work before most of them can even legally vote. We ask them to choose their life’s work before they’ve barely had time to live. And then if they can’t we seem to promote the myth that they shouldn’t worry—they’ll find out what they want to do during their freshman year. Instead, Stephens argues, we should be encouraging these people to put off college until they can find out what they really want in work and life.

"We’re told that college is a great place to ‘find yourself,’ but in reality there’s little guidance or coaching to help you understand potential careers," he says.

I can definitely understand this reason. At 16, I had to decide which schools I wanted to apply to, and that had to be based on what I wanted to study. Then, at 17, as a freshman, I had to start figuring out what I wanted to major in, which would certainly influence which types of jobs I would be interviewing for after graduation. And I can assure you, I was nowhere near mature enough to make these types of decisions. I didn’t know myself well, hadn’t been exposed to much more than a Midwestern suburban upbringing, and at college was like an animal let out of a cage—on my own for the first time in my young life. Also, as Stephens notes, my college advisors/professors/classmates didn’t do much, if anything to help me sort it all out.

In any case, here’s Stephens’ reason number TWO:

If you want to gain a specific skill set.
If you want to become a doctor, lawyer, or accountant, then absolutely, 100% you need to go to college. Those professions are dictated by regulatory bodies and the only way to become accredited is by following their regimented educational structures.

However, other skill sets—like those needed by the software developer, designer, photographer, or even journalist—can be acquired outside of the traditional education system–and those that desire these types of skill sets should look outside traditional education.

This reason is nearly the opposite of Stephens’ first. If you’re mature enough and know exactly what you want to do with the career portion of your life, and you won’t be able to learn the desired skills in academia to reach your career goals, then indeed, go and get them through untraditional means. The benefit to this could be threefold: a) it’s cheaper, b) you’ll learn more and more quickly in your desired field of concentration, and c) if you do ever go back to college, you’ll have a lot of interesting, unusual experiences on which to draw, which could help you get into a better school than you could have in the first place; and it could focus your studies at university when you do go, so you get the most for your money.

And THREE:

If college is going to leave you with more than $50,000 in debt—and that scares you.
The final type of person that Stephens believes should give college a miss is also probably the most obvious: those that don’t want to rack up high five- or six-figure student loan debt. After all, if your student loans are going to keep you from enjoying life and working at two jobs just to pay them off so you can eventually work only your one dream job—is that worth it? Stephens doesn’t believe so, especially when, to his point above, the skills for so many in-demand jobs today can be acquired through workshops or online learning courses.

But that’s not to say that if you’re this type of person, you’ll never go to college. As Stephens points out, those in this category may want to consider looking at colleges overseas.

"College in Germany—and many other countries—costs about 280 euros ($315) a year," he says. That’s a much wiser choice than a private liberal-arts college with a $60,000 per year price tag."

It’s important to point out that that cost for college in Germany also holds for American students. The only hitch is that classes are in German. So it could pay to start learning the language now in case you ever decide to head to Berlin or Munich to pursue a degree. Or, if you’re reading this and you’re a parent, to invest in some German language classes for your kids.

Overall, Stephens’ and (Thiel’s) thinking seems to be not that college is not the answer for everyone, but rather that there are more options open to teenagers than college right after high school. And so it makes sense for young people to consider all options, and to think about them hard and long before they jump in and take on hundreds of thousands of dollars in heavy, burdensome debt.

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