How to finance higher education | Few Minute Finance

Is college worth going into debt over? The short answer is no.

Luke Miller, “Few Minute Finance”

Luke Miller, “Few Minute Finance”

You’ve probably heard it said before that “the most important investment you can make is in yourself and your education.” From almost any angle, this statement is solid advice. But, as with many truths, it is often bent to justify decisions and ventures that cause long-term frustration and regret – enter America’s current crisis of student loan debt.

Is college a true investment worth going into debt over, often for years, or possibly even for decades after graduating? In a word, no; I do not believe so. This is my personal opinion as someone with a college degree who has been in the workforce for almost nine years since college graduation. I have witnessed the real burden of student loan debt on those already struggling to begin their careers and build their post-college adult lives.

You do not need to attend college to be successful, even wildly successful. While Chris Hogan’s unprecedented study of 10,000 millionaires in the United States found 88 percent of millionaires have at least a bachelor’s degree, 60 percent of those interviewed graduated from a public institution, with 8 percent graduating community college. While statistics show a degree can be helpful in the wealth-building journey, plenty of outliers exist. I personally know several millionaires without degrees. There are other popular icons who never attended or finished college, including Bill Gates, the late Steve Jobs, and Richard Branson. College itself rarely influences your success directly, nor is it justification for saddling oneself with debilitating debt.

I view my college experience much the way I remember my first car, a 1995 Chevy S10 pickup we finally sold several summers ago – necessary for my purposes, able to get the job done and move me towards where I wanted to be, and a valuable tool for the time it was required. But it was certainly not worth going into debt over, especially debt I might carry with me long after I was driving a different vehicle. I once heard a radio listener call into the Dave Ramsey Show for some financial advice; she was a stay-at-home mom (let me be clear: a job and calling I believe is the most important in the world), and she had tens of thousands of dollars in student loan debt remaining from a degree she never planned to use again.

I hold a bachelor’s degree in flight science with a minor in economics, and if I had stayed in college one more quarter, I could have double-majored in business administration. Instead, I took my last final exam a week early, skipped graduation, went straight to regional airline ground school, and had my degree mailed to me. The reason I even obtained a degree is because, at the time, the major airline I hoped to someday work for required a four-year degree to be hired as a pilot; it was a long-standing requirement. Yet, operating an airplane to the highest degree of safety doesn’t require a college degree, and much of the industry, my employer included, has since dropped the requirement.

I learned some fascinating things in college. But besides the aviation part, a basic understanding of economics and supply and demand, and a semi-working knowledge of accounting principles, I use virtually zero of my college education functionally in my day-to-day life.

The most important part of my entire education was the ancillary effect it had on my life, much of which solidified even before college. I learned how to manage time, the importance of structure in my life, how to plan and accomplish tasks and goals, and, most importantly, how to learn continually and think critically. These lessons were worth infinitely more than any particular class (sorry, Geography 101).

So yes, college is an “investment”, but not perhaps as traditionally defined, like a home that continuously accrues value over time and can be sold at a profit later. Think of it more as a building block or a useful tool in your arsenal. A college education should be a blessing and an asset, not a curse and a liability. Several columns ago, we discussed the important distinction between taking an “asset” mentality – investing heavily in things that increase in value over time (such as real estate or retirement investments) versus having a “liability” mindset – that is, using your hard-earned money to buy things not necessarily harmful themselves, but that go down in value over time (financing a new car every 3-5 years, putting each year’s new iPhone on a payment plan, or taking a vacation by putting it on a credit card). Done correctly, college could help open the door to a lifetime of asset-building; not college itself per se, but in the opportunities it avails, the skills it teaches, and the connections it helps create.

Actions you can take today, right now: as a student, or as a parent of a student, come together as a family. Discuss and formulate a desire and plan for how college will be paid for with cash. Yes, it is possible! Check out Anthony ONeal and his resources and books, including the best-selling “Debt-Free Degree”. Make it your business and part-time (or full-time!) job to research and apply for scholarship opportunities. For me, my family used a combination of some college fund savings, a number of scholarships (influenced by factors like high school/college grades, essays, and other things), and jobs during college to avoid student loan debt. As a parent, start contributing regularly to investments in a tax-advantaged college fund, such as a 529 plan or education savings account (ESA), but make sure you’re out of debt first and in touch with a financial pro who can guide you through the process. If the numbers still just don’t add up, consider how you can reframe the education process to meet your end-goal. An in-state public school may be insanely cheaper than an out-of-state school for little real-world difference. There is also consistent demand and excellent pay for traditional vocations and trades, and there are many very reasonable-priced training programs and academies.

We live in unprecedented times. Technology has made high-quality, low-cost (even free) learning readily available. Most of what I’ve learned about real life and personal finance comes from a curated collection of books, wise mentors, and solid best practices. You don’t need a degree to understand building a budget, investing for retirement, purchasing real estate, interviewing for and obtaining the job you truly want, remodeling your house, or developing healthy boundaries and relationships with your spouse, family, and friends. The knowledge is out there, and most of it is free. College is a worthy aim, and whether you pursue it or not, if you seek wisdom and knowledge diligently enough, you will find what you are looking for, I guarantee it.

Luke Miller is passionate about helping others succeed in their finances, careers, and lives. A fourth-generation aviator, he is a pilot for a Seattle-based major airline. Luke and his wife live locally in Enumclaw. This article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice.


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