I hope you had a great Thanksgiving, and I hope my previous article about it inspired you in being more aware of how you spend your time with family and friends. Today we return to my Kubo King’s Thoughts On College Education series with part 3 (see part 1 and part 2). This will be the second to last article in the series, meaning there will be one last part posted next. Anyway, this article focuses on main strategies for cutting the cost of college education down. So read on!
Two years ago, the year 2016, the percentage of high school graduates who headed off to college was around 70% [1]. Some of them may have had clear goals, plans, and expectations from higher education, and had thought out good strategies for tackling the financial burden it would place on them after graduation. However, I suspect that a large number of them did not have such things, and were only there because they were instructed to be there — to be successful in life. They get to universities with no real plans and no real goals, only armed with the hope that their lives will be better if they study some kind of field and receive some kind of degree. The fortunate ones, like me, end up figuring it out on their own, while the unfortunate ones do not. But, that is why this article exists. I want to help people like you who are unsure about college and do not have parental subsidies to fund a, sometimes hedonistic, college lifestyle.
If you are thinking of pursuing a 4-year college degree, then start by trying to figure out which field of study you may want to pursue. And once you have a clear idea research the type of jobs a large number of people get with a degree in that field. For a few of those jobs, perhaps the top 3 based on employment numbers, find out how much money you could expect to make. As an example, let’s say you studied history and a popular career path for history majors is to become a high school teacher. You should go to the Bureau of Labor and Statistics website, examine the occupational outlook handbook, and look at the median pay for high school teachers — $59,170 [2]. Though not perfect, that amount roughly tells you the salary you can expect to get, which is what you’ll use as the basis for evaluating whether the degree is financially worth it.
Now that you have a rough idea of the financial return (the median salary) the degree might give you, the next logical step is to figure out how much going to college will cost you. There are essential things you need to consider: the tuition fee, room and board, food, and transportation. The tuition fee is easy to figure out since universities will have that information readily available, and the same goes for room and board if you were to live on campus (living in campus dorms). And if you are planning on living on campus then transportation costs might be negligible since you will probably get around just fine by walking or biking to places. But, if you decide to live off campus then look at the average rent in the area for a studio or a bedroom in a shared housing. Rents tend to be cheaper the farther the property is from campus, but transportation costs might become significant. For example, you might need to rely on public transportation more (or worse, have a car with you) if you live far enough, which has fares that go with it. The cost of food largely depends on how much and what type of food you eat.
Treat the estimate from above as the minimum cost of studying in that university each year. This is because things always tend to cost more than you’d expect. For example, tuition fees have a tendency to increase, textbook prices are hard to predict, or you might want to take attractive people out on dates sometimes instead of just doing Netflix & Chill all day. Now multiply that number by 4 and you’ll have the estimate for the minimum total cost of completing and receiving a degree from that university. Compare the total cost against the median salary you were expecting to get in return. A good heuristic is if the total cost is no more than half of the median salary; then you might have a good chance of coming out ahead financially [3]. Going to college might actually be worth it. However, if the ratio you got is unfavorable do not panic just yet. There might be things you can do that can bring down the total cost.
The most important one is to ignore expensive private universities and focus on affordable state universities. And if you reside in a state with good state universities (like Michigan or Texas), then strongly consider those schools over state schools in different states. This is because in-state tuition fees are significantly cheaper than out-of-state tuition fees. It is easy to see why this strategy alone will make the cost of going to college more affordable.
Another thing to strongly consider is going to a community college for the first two years. Community colleges are more affordable compared to universities [4], just about every city will have one, and they will most likely offer the same courses that freshmen and sophomores will be required to take in universities across America. The great thing is that those courses are usually transferable to universities. This means that you can spend the first two years at an affordable community college, and then transfer to a university for the remaining two years to graduate with a university degree. This is more affordable than studying at a university for the entire 4 years.
You can also look for and apply to scholarships that will pay for some of the costs of higher education. There are two types of scholarships — merit based and need based. Merit based scholarships are typically awarded to people based on their academic, athletic, or artistic achievements; while need based scholarships are usually awarded to people who come from one of the socially disadvantaged groups (e.g., ethnic minorities and low-income families). So if you have done well academically (or athletically or artistically) or belong to a socially disadvantaged group then there might just be some free money, from scholarships, for you to use towards your educational goals.
Lastly, if it is suitable for you, pursue a major that will give you skills that are in-demand since it will enable you to have a good earning potential. These majors are under the umbrella called STEM (for Science, Technology, Engineering, and Mathematics). In fact, if you peruse any list ranking majors based on earnings its graduates make you will find that the top 10 is usually dominated by STEM majors [5]. Looking back, switching from pursuing history to pursuing computer science was one of the biggest things that benefited me financially. I strongly encourage you to do something similar if you have any aptitude for science and math [6].
Though not an exhaustive list the strategies above offer great starting points for financial planning for college. Each situation is unique and the options above may or may not be available to you, or you might have other great options unique to your own situation. So I strongly encourage you to think of other ways in which you can bring the cost of college down. However, if after a lot of research and calculations the ratio is still unfavorable, then maybe it’s time that you think about a different path altogether. Maybe going to college is not a good move for you (at least not right now). Fortunately, you need not be afraid. There is another path in life that is both mentally and financially rewarding. We will discuss the details of it in the next article.
[2] https://www.bls.gov/ooh/education-training-and-library/high-school-teachers.htm
[3] The lower your debt is relative to your salary, the more easily you can make the minimum monthly payments. And, of course, you’ll also have a greater ability to pay it off aggressively like I do. Conversely, the higher your debt relative to your salary, the more difficult it will be to pay off. There are some people who think they will never be able to pay it off.
[4] Along with their more affordable costs, community colleges also have other advantages that freshmen and sophomores might not have at big state universities. Classes are typically a lot smaller, which means you get more attention from teachers. The main duty of a community college instructor is teaching, while university professors usually have teaching, research (also managing their own students), and committee duties. You might not have a renowned math professor who is advancing the field of group theory teaching your first-year calculus class, but nothing has changed in first-year calculus and he’ll most likely be using the same textbook anyway.
[5] https://cew.georgetown.edu/cew-reports/valueofcollegemajors/
[6] I don’t like that I have to give this advice. Is it practical given the current higher education model in America? Yes. But frankly, education should not be about making money. Also, people should not be forced to solely study STEM in universities. A country with nothing but engineers and scientists? What a boring country we would be.
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