Chris Bigelow

Disparate thoughts and musings…

The Dream of Higher Education: Has It Become Just That – A Dream?

I’ve been thinking about this for a while.  Perhaps because I have a child starting post secondary education in another year.  Perhaps because I am, as the popular euphemism goes, “in transition.”  College has gotten ridiculously expensive.

Let me back up for a minute.  I attended college at Clarkson University (then known as “Clarkson College of Technology”, or “CCT”).  It was a kinder, gentler time.  And cheaper.  Not that we realized it then.  At the time it seemed like a lot of money to go to college.  My how one’s perspective changes.

Clarkson projected that my freshman year of school would cost something on the order of $5,400.  To a 17 year old that is one mighty large figure.  This number included tuition, room, board, books, and some altogether too meager allowance for laundry and other expenses.  But as numbers go, probably not a bad approximation.  I don’t think their figure included any allowance for travel to and from school.  My freshman year I accomplished that carpooling with an older Clarkson student from my home town in a VW Beetle. And NOT one with a bud vase.   But I digress.

So, back in the day, four years at Clarkson pursuing a “lofty” engineering degree would set you back somewhere between $23,000 and $25,000 (and, no, we did not use slide rules).  I changed majors mid-stream and required one extra semester to line up credits, so my cost was probably another $3,000 higher.  Upon graduation I was fortunate enough to receive two job offers.  Having been dirt poor (trust me – starving artists have nothing on college students) for 4-1/2 years, I accepted the higher offer.

No doubt breaking some social taboo, I will confess that my starting salary out of college was $407 per week.  <tap tap tap>.  That’s $21,164 per year.  So, in rough numbers, a four year (we’ll ignore my extra semester for a moment) engineering degree from a well respected, private institution cost roughly 15% more than my starting salary.  Are you with me so far?

Fast forward to 2009.  I don’t have exact figures but, prior to the nasty recession we are in, starting salaries for graduating engineers were running around $50,000-$55,000 for a manufacturing or mechanical engineer.  Let’s split the difference and call it $52,500 (and before I get inundated with emails let me note that, yes, I realize that there is a difference in starting salaries between, say, a civil engineer and a chemical engineer).

As I mentioned earlier, I have a college bound child.  One more year to go.  Naturally, we are doing the college and major research thing (automotive engineering no less!).   So off I go to various private, engineering school web sites to check their estimated first year total costs.  Ouch! My findings are summarized below:

College cost BMP3

Even if we take the least expensive school (in this example Kettering, and by no means a reflection of it’s reputation), first year expenses have increased 640% ($34,572/$5,400).  Meanwhile, starting salaries have increased roughly 248% ($52,500/$21,164).  What’s wrong with this picture?  A four year engineering degree now costs at least $150,000, or almost three times the first year’s starting salary.  Is it any wonder that students today are graduating with a staggering amount of college loan debt?

And is it any wonder that people are beginning to question the value and payback of a college degree?  Factoid: From 2000 to 2006, there was a 10 percent growth in overall enrollment at two-year institutions, according to the most recent figures from the Department of Education (data from http://www.insidehighered.com/news/2008/08/22/growth).  And I read a fascinating analysis a couple of months ago arguing that there was a strong economic case for becoming a plumber instead of going to college.  Hey – we’ll always need plumbers.  Food for thought…

22 Comments»

  Bill Griffin wrote @

Great perspective Chris,

My children (8 & 6) have a little time before college. I hope I can lead them in the way of scholarships. It’s alot of money but I’m sure you’ll figuer it all out.

Best of luck,

–Billy

  Chris Bigelow wrote @

Thanks, Billy.

Fortunately for me, my son is bright and does well in school. We’re awaiting his SAT and ACT results to get a better feel for which schools would be his best choices and how best to leverage his scholastic performance into scholarship money.

Like my accountant once said: “You can borrow money for college but you can’t borrow money for retirement.” This sage advice came after telling me not to contribute to a 529 plan until I was certain I was putting enough away for retirement.

  moneyforstuff wrote @

Great topic Chris. I dread the point in 4 years when my son goes to college. We’re already thinking about having him do a 2+2 program where he goes to a community college for 2 years and transfers to a 4 year school to finish it out, hopefully saying some significant cashin the process.

Michele

  Chris Bigelow wrote @

There are some terrific 2+2 programs available, and it’s an option we are considering. There are also some very good state universities at less than half the cost of private schools.

Another ace-in-the-hole is Olin College of Engineering in Needham, MA (http://www.olin.edu/). If you manage to be one of the 160 students they accept each fall, tuition costs for all four years are waived. You still need to pay room, board, books and so on – but no tuition.

  moneyforstuff wrote @

Wow, that Olin College is a great deal. Still too early to figure out what my son wants to major in yet.

  Steve wrote @

Chris,

Well I am currently out of work too like you. I have a Masters from RPI. In my situation, I think I spent too many years in the automotive industry. Seems like just having an associates degree in Mech Technology or Renewable Energy is a very respectable education and worth the payback compared to 4 yr B.S. That is exactly what it is these days… B.S.

The keyword in this recession is ‘retraining’. So whatever your child aspires to becoming, it better be in the growing fields like robotics, green, battery development, and biosciences.

  Chris Bigelow wrote @

The automotive industry has definitely been hard hit in this recession. I was talking with a friend a few weeks ago and he mentioned that worldwide automobile production capacity is at something like 95 million units per year and demand is at something like 55 million units per year. I’ve been unable to vet these figures but, if true, the only solution is to reduce the overcapacity. So I think the auto industry is in for a long stretch of readjustment.

That said, I’m confident they will emerge as stronger companies. Regardless of the direction that power plants take, personal transportation will be around for a long time – at least in the USA.

It seems your automotive experience ought to translate well into other industries, but you did not mention your major so I could be wrong. Have you looked into working at companies serving the automotive aftermarket?

  Doug M wrote @

Chris – great article! I enjoyed the breakdown.
It’s crazy how expensive college is now.

I was actually going to mention the 2 + 2 program. Both Alfred State & MCC have terrific Engineering Science programs that would help you save money and also help your son on his career and college path. I actually help coach the MCC lacrosse team as an assistant and it’s great to see our men transfer to 4 year colleges including Ithaca, RIT, St John Fisher, Naz and many other colleges around the area and other areas as well.

I actually took Engineering Science at Alfred State and transferred to MCC after 2 years at Alfred. I have to say, the program at MCC seemed to me to be much tougher then Alfred. Many times MCC gets the label, it’s just an extension of high school but as an alumni (Business Admin) I can def say it’s not easy at all. I had great experiences with both colleges and would say check both schools out and see if your son likes one of those two choices.

Keep me posted and if I can help in anyway let me know 🙂 Keep up the great work Chris!
DM

  Chris Bigelow wrote @

While lots of the community colleges have reputations as being mere high school extensions, there are certainly many with exceptional reputations. MCC falls into this latter category. They have a terrific 2+2 program with guaranteed admission into the junior class of their partner schools.

  Scott wrote @

I graduated with my MBA in Information Security and even though I am currently employed I have not been able to move up.

I graduated just before the recesstion hit – timing is everything! I have even starting to offer some services for free in order to gain experience – thus far no takers!

It appears that employers are not serious about business. It is a buyers market and employers are not buying! I constantly hear of people wanting to work and even though the employer advertise a position they are not willing to fill the position. Others state that the employers are offering jobs at a ridiculously low wage while demanding experience.

  Chris Bigelow wrote @

I definitely agree it is a buyer’s market right now for companies. I have heard of some companies advertising for, and even interviewing for, positions they had no intention of filling. The horror stories are out there, but I believe these companies to be the exception rather than the rule.

And some companies may be taking advantage of the economic climate to offer lower salaries but, ultimately, hiring people at below market salaries will only hurt any company that engages in such a practice.

But don’t give up. The experience of myself and many other job seekers I know proves out that there are real positions being filled at competitive rates. It is just taking a lot more digging to unearth them. And this recession won’t last forever.

  engineering student wrote @

Hello,

I enjoyed reading your article on education especially when it comes to engineering.

I still have a year to graduate but it is sad to think that I have friends that will take any job right now even with very low starting salaries. There are even fewer companies that will pay for your Master’s nowadays. It makes hard to work for a low salary and not even have the support of your employer in furthering your education.

I do attend Wayne State University and I believe for engineering it is the best deal you will get. I paid more for my high school education (private school) then I have had to pay for my engineering education at Wayne State. There is an enormous amount of scholarship money from donors and being a Carnage Institution in research,there are many opportunities for undergraduates to pursue research.

  Greg Taylor wrote @

Interesting reading. Honestly, I have never heard of a student or child “dream” of going to college. That is especially true for a suburban teen who is simple expected to follow his peers going to college. The dream might be so for an urban student whose family never had the opportunity in previous generations. The dream is for a good paying job/

My own reading has uncovered the fact that 80% of the class of 2009 is unemployed. The investment for 2-4 years might be anywhere from $20,000 to $200,000. The payments start when you graduate.

In a sagging economy who gets back to work first, is it the seasoned professional or the green college graduate? The seasoned and downsized “knows” it the more affordable, younger professional. The young professional “knows” that the job goes to one with more experience.

I think it goes to the one who markets their skills better, studies workforce trends, looks for opportunities with a fresh perspective, is excited by problems, shares thought and analysis and frequently demonstrates creative and innovative thinking. Innovators set themselves apart. They take risk, make mistakes, improve and make a difference with their persistence.

Professionals valuing their own experience promote their past. Is looking at the past the bridge to the future? There is tremendous opportunity to make the world a better place when thinking differently and looking forward.

Is a college education the ticket? It’s probably not the degree. It’s the desire for learning. A degree never solved a problem on its own, but a person with passion for learning will find a way. It’s a world of paradigm shifts and rapid innovation. I think education will remain relevant and critical, but it will be more of what are you learning and researching now, not what and where did you get your degree long ago.

  Barbara Saunders wrote @

Since graduating from college 20 years ago, I have worked at several jobs and fields that did not exist when I started school. Some of them are already obsolete now. College provides some learning, training, and intellectual mentoring. It can supply useful personal contacts. The experience of college can be valuable.

However, it no longer provides the path to a predictable career.

  Ellen Predham wrote @

Wow, great article. I share your concern and pain, as when both of my daughters were in college and being a single parent, I was downsized from my from very well paying job. I was fortunate to be able to find work with the TSA for the Homeland Secutity project which kept me solvent for that period. After that, my oldest had to move back in with her grandmother and commute to NYU and my other daughter at Drexel was forced to work almost a full time job while attending. I used every last dollar I had in addition to help from my parents to make sure they both finished and now only have a $12K loan for my youngest, but by the time my oldest had graduated NYU, yearly bill was 50+.

A far cry from my education with CUNY and an MBA paid for by two very generous companies! While both of my daughters are gainfully employed, their salaries do not come close to a ROI on their education. I only hope with this recession that higher education gets back to reality with tuition costs and makes college what it should be, a learning experience at prices based on the real world.

BTW, even with my experienced credentials, I am also “in transition: again.

  Tom Maioli wrote @

Great article!

Keep in mind too that information is doubling every 18 months, so what you learn the first two years is obsolete by the time you graduate.

Education will be a ongoing thing as we all know.

What I hate is employers want a check box to check off that say yes they have a BS or whatever, even if it is in something unrelated – I just don’t get it.

  Nicklesforthought wrote @

As a semi recent graduate — I see many of my friends (and self) in this predicament. The “rules” of the game have changed, and it’s no longer good enough to work hard in school to get a good job. Even then, you still may be paying off your school loans far beyond you ever thought you would!

  Jim Grunert wrote @

Chris,

I share your concern. I was laid off in February as my daughter was in the middle of her freshman year at college. Certainly unnerving to know loans were already in place and then wondering if a second year would be possible with the added burden of knowing she was unhappy and would be transferring and then trying to determine if/when/how that would occur. Though I’m working again, it’s still a matter of borrowing for her education and trying to walk that fine line between providing the education and managing for a retirement that seems to be getting farther and farther away. I’m sure many of our parents had the same worries and things tended to work our so I’m hopeful that our generation’s worries will also have the same result.

  Karen Zilora wrote @

I would encourage you to look at state universities from other states as well. The University of Delaware has a great reputation for engineering and offers a lot of merit-based aid to attract top students. My daughter (science major) got 4 years of free tuition. UConn also offered her a lot of merit-based aid (she would have been paying the equivalent of in-state tuition).

As far as I know, Cooper Union is still free.

  Chris Bigelow wrote @

Thanks for your suggestions, Karen. I was unaware of Cooper Union being free. Olin is another school (in Needham, MA) that offers all accepted freshman a full tuition scholarship. I Googled “tuition-free colleges” last night and found there are about ten such schools in the US.

  Mike Walsh wrote @

I think one needs to look back on why the big movement to “everyone needs to go to college” got started.

Our parents taught us that not only would a college education bring us more money, it would also bring much more job security.

Unfortunately, this is no longer true.

There is a huge disconnect between where the cost of education has gone, and the value, as Chris points out.

The truth is, today you can be no longer needed extremely quickly, and I’m sorry, but maintaining currency in your field is no guarantee either. In fact, in our local area we have watched software and networking jobs completely disappear, while at the same time there is a shortage of talent for the bio/med/pharm. None of those firms will look at product managers, marketing, sales, project managers, etc – all of who have transferable skills but are perceived as not qualified for a different field.

There was once a time that job skills were transferable enough that a professional could move from a technology that was no longer popular to one that is, however as the example above shows, this is no longer true.

As I see it today, entire industries are waxing and waning at a moments notice, or picking up and moving elsewhere. At the same time there is an excess of students graduating from college with no jobs to go to (is this a supply and demand problem?).

The “expiration date” on a college education is getting shorter and shorter, and I agree with the questioning of a degree’s value today. I have two boys, and I’m going to steer them to pursue livelihoods that are tied to true human needs and are not tied to a house of cards like so much of information technology is today.

  Chris Bigelow wrote @

Thanks for contributing some excellent points, Mike.

As I think I mentioned in my very first blog post, job security today rests solely on your skill set and what you can do to improve a company’s profitability. Traditional job security no longer exists. Not sure where you are located but, here in the Rochester, NY area we’ve been hit by a double-whammy: significant loss of local jobs, particularly in manufacturing, and declining salaries as noted in this Forbes article: http://www.forbes.com/2009/06/30/cities-wages-unemployment-business-economy.html?partner=email.

I believe as employees we need to be ready to transfer skills (tough to do now in this economy, but I think companies will open back up on this when there is no longer a glut of candidates) and transfer ourselves (i.e., be prepared to relocate to follow the healthy industries and jobs. I’m currently between positions and, as much as I would like to stay in Rochester, my job search covers everywhere east of the Mississippi.


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