As a father of three high school and/or college-aged children, I am much attuned to the high cost of a college education and I have some deep rooted opinions regarding its value. As a starting point, I think the experience can be extraordinarily rewarding for those who take full advantage of the complete experience. This experience includes not only the time spent in classrooms, but also the ability to act and think independently. It includes honing one’s social skills. Oftentimes, college provides the opportunity to travel abroad and develop friendships with students who come from far different social, religious, economic, and geographical backgrounds from one’s self. In a perfect world, a parent sends away their 18 year-old son or daughter and re-connects with a mature and self-confident young adult at graduation. How grand it must be to watch your young adult enter the work force or go on to higher education, capable of making his/her own decisions and no longer dependent upon their parents to “hold their hand.”
Unfortunately, this is not the experience of many. I believe too many teens enter college without an understanding of what is expected of them. Too often, their coursework and degrees do not prepare them for the workforce. Their parents, counselors, and educators have not challenged them to think about life beyond graduation, and thus, they are often clueless about their future. Moreover, the rich experiences that campus and dorm life offer are often missed and the rite of passage into adulthood is delayed. I also fault the students who may view college as “party time”; failing to understand that going to college is a privilege and in some respects, should be treated as if it were itself “a job.” For students who are lacking the maturity or skills to achieve these goals, perhaps we, as parents, should not be in such a hurry to push them off to school before they are ready.
At the same time, the cost of education continues to rise at a rate far greater than the rate of inflation. Thus, I am led to believe that the competitive pressures that most business owners face on a daily basis have yet to fully penetrate our educational system. (I will save my rant on this issue for another day.)
As a result, we now have an environment where many young adults are not fully prepared to enter the work force and are facing a mountain of debt which will be hard to service. In fact, it is estimated that student debt is now over $1 trillion, and growing. Yet, many recent graduates must often settle for work which does not match their career preferences and pay expectations. Not only is this a bitter pill to swallow for a large number of recent graduates, it also presents a burden to many businesses that can only thrive with a trained and skilled workforce.
While I am not suggesting that this growing debt level will derail the fragile economic recovery that we are currently clinging to, let’s not underestimate the importance of fixing the structural and financial issues surrounding college education. Our economy and our children’s future depend on it.
All thoughts are welcome.
Christopher J. Kress, CFA