College Funding, Value and Grade Inflation: Should Your Kid Go? Should You Pay?

“You had rich parents. You got to go to that expensive community college.” – South Park

If you do college right, you end up being able to travel to cool places.  Literally cool, like Alaska.  Do it wrong?  You’re stuck on some hot beach in Florida during spring break.

I’ve posted several times about college here, but mainly from the perspective of the student.  The other major perspective to catch is that of the parent – whether their child is asking only for advice (in a dream world – 18 year olds know everything so why would they ask an old person for advice?) or you are paying full tuition for them to attend Harvard®, you’re involved.  What questions should you be thinking about when they come looking for money advice?

I think the first and most important question is if your kid should go to college at all.  In 1960, it wasn’t a given that kids would go off to college.  Only one kid out of twenty would go to college and graduate with a bachelor’s degree or more.

The line goes up and to the right.  So, everyone is getting smarter because here in America EVERYONE is above average!

And, possibly, some folks weren’t going to college because they had been inappropriately excluded.  But now?  70% of high school graduates start college.  70%!

By definition, AT LEAST 20% of the people who go to college are below average in high school.  And 84% of kids now graduate from high school.  Assume the dumbest drop out (not really a good assumption, but we’ll go with it).  Let’s assume that the dumbest of the high school graduates don’t start college (again, not a good assumption, but we’ll go with it).  Still, 20% of the people starting college would then have an IQ of less than 100.

The overall college graduation rate is now 60%.  Which is ludicrous.  Even more ludicrous?  At Harvard©, more than half of the students have a GPA of 3.67 or more, meaning even at Harvard™ the challenge isn’t surviving Harvard©, it’s getting accepted.  Admittedly at Harvard the average IQ is 125 (decent), but it sounds like the grade fairy visits there often.

So, if your kid can get into Harvard™ (or Yale©) (or Stanford®) (etc.) they should go there.  If they’ve got decent study skills they’ll pass.  The reason you go to Harvard™ to learn, really, you can get just as good of an education at Iowa State© for much less money.  No, the reason you go to Harvard™ is to hang around with really, really wealthy people and make connections so that you’re hanging out with Mark Zuckerberg’s kid in 2032 or whatever.  If you’re besties with a Zuckerberg because you had a car and Daddy Mark wouldn’t buy him one so you drove him to strip clubs?  You’re set for life.  They will make sure you have an awesome career, even if it just involves hanging around with their kid driving him to strip clubs for a ludicrous salary.

Think what Mark Zuckerberg might have accomplished if only he had finished college at Harvard!

The second reason that your kid should go to college is that they’re studying some sort of real science (not a fake one like sociology or anthropology) or engineering.  You have to go to college, and since these degrees have (at least in the past) weeded out the intellectually inferior, well, they will generally lead to much higher wages.  Ditto being a doctor or nurse.  Now, as soon as we start asking how the bridge feels?  Yeah, engineering will be done for.  If we haven’t done that already.

See, this is an example of creative engineering.  I’d pay to watch people drive this . . .

But a lot of college degrees are worthless – college becomes a four (or five, or six) year day-care for those unwilling to head to real life.  And it costs and amazing amount of money for day-care.  I’d just as soon give the kid enough money and send them to France for six months, not because I like my kid, but I think that France should be inundated with mouthy self-entitled 18 year olds.  It’s my gift to them.

I used to think that all bright kids with good character should go to college.  I don’t think that anymore.  I had one kid I worked with (in a volunteer position).  I asked him what he wanted to do after he graduated high school.  He described a career option, where, as a journeyman, he could live in rural North Midwestia and still make at least $80,000 a year after five years, and probably more like $100,000 after the all the overtime that you can generally pick up is figured into this.  When he started his apprenticeship he already had competing job offers for when he graduated.

My knee-jerk reaction (programming wears off only slowly) was to tell him, “No!  Go to college!  You’re so smart!”  And if I had given that advice and he had taken it, well, when he graduated he’d have $60,000 in debt and (if he was lucky) would have to fight to get a $40,000 a year job.  His idea was way better.

So, consider, should your kid even go to college?

Let’s say that you decide it’s worth it.  College won’t be a four-year boondoggle filled with lattes and climbing walls and easy A’s – it will actually mean something.

How do you pay for it?  Do you pay for it?  Should you pay for it?

This is why I’m against government paid college.  Then you’d have to get two doctorates and dress in an outfit made of bigfoot hair and unicorn sweat to get noticed in a job interview.

Part of the reason that college becomes a long-duration fun-fest is the problem of skin in the game.  Kids are having fun at college – why would they want to end it?  The colleges are making great profit off the kids.  Why would they want to end it?  The only people who want to end it . . . are the people paying for it.

Incentives are very bad, indeed, especially if you’re the parent footing the bill for it.

I guess I have to leave it up to the parent, but there are other options (for many people) outside of paying for it or saddling your kid with a massive debt.  They could be a great athlete, and get a full scholarship.  And don’t kid yourself – some engineering and technical schools have sports teams and need people that can play reasonably well.  Not NFL® talent.  Not University of Alabama™ talent.  Just well enough to not get hurt against the smaller NCAA Division II schools they play against.

ROTC is another one.  ROTC is the Reserve Officer Training Corps.  It depends on the service, but in some cases they’ll pay for your kid’s college, train them to be a military officer, and then guarantee them a job.  The Army will be happy to take them as an active duty officer, or will offer them a slot in the Reserves.  For the Air Force?  If you’re Air Force ROTC, you’re going active duty.  The nice thing about the Army?  For one weekend a month and two weeks a year, you get your school paid for in just a few years of reserve duty.  Assume it’s four years, and that’s over a thousand dollars a day they’re paying you, and some people don’t even make that kind of money during a summer job!

Both The Boy and Pugsley are reviewing this option.  It would probably work well for both of them.

Of course, there are loans.  But these can backfire amazingly.  I was reading a few years ago about a guy who borrowed enough money to become a medical doctor.  Downside?  He owed upwards of $500,000, and wouldn’t be able to pay the loans off.

That doctor is gonna die in debt, because that’s just about the only way to avoid repaying a student loan.  Or maybe he could make friends with Warren Buffet’s kid?  Know where the strip clubs are?

Hmmm.