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The Best Path to a College Degree - and Actually Learning Something as You Go

Saturday, March 8, 2014

I have two high school age boys.  The older is a junior and the younger is a freshman.  This is the time when students start getting notices from colleges and the perennial solicitations for test prep classes show up in the mail box.

The schools our boys attend have a "college-bound" ethos that assumes their students will head on to college after graduating.

No beef with that here.  But...

There is an unspoken assumption, and it is not unique to our kids' school.  To be "college-bound" is assumed to mean you will apply to be accepted into a four-year university after graduating.  High school requirements are calibrated to this assumption.  Here in California we have the University of California (UC) system (e.g. UC San Diego, or UCSD) and the California State University (CSU) system (e.g. San Diego State University - GO AZTECS!).  The UC system has a requirements track which most high schools - public and private - follow.

Before going further, let me make sure I am not misunderstood.  I do not challenge the assumption that a college degree is a worthy goal - worthy both in the sense of overall personal development and in the sense of future economic opportunities.  I do not even challenge the assumption that getting that degree from a reputable four-year university is a worthy goal.  The assumption I do challenge here is the assumption that the best path to this end - a college degree from a reputable school - is to go directly from high school into that reputable four-year university.

Let me put the challenge out there up front:  There are two numbers we can look at.  The first in the percentage of kids who are accepted and enrolled in a four-year university right out of high school.  Our schools - again, both public and private - like to point to that number when establishing the value they provide.  But there is another number: the percentage of our kids who graduate from a four-year university.  I think that is the far more important number.

Unfortunately, though, these are the only numbers we usually see when discussing value in education.  There is yet another number to consider: the amount of student debt incurred by those students who graduate from a four year university.  In our private school circles (contrary to what many might think) not all parents have the means to pay for their kids' college education.  Some do, but even then, whether the money is provided by the bank or by "The First Bank of Mom & Dad", the amount of money spent on that four-year university degree is a number you will never see in those mailings we are getting right now.

Here is why I believe that number is crucial to the overall goal of education for our children.  There are essentially three phases of life.  You are a student, you are a worker and then you are a retiree.  We want our kids to graduate from the first into the second with the knowledge and skills to be productive and to create wealth - even if it is only a little for themselves in retirement.  And our schools should understand this - we regularly are told that tuition only pays for part of the costs of running a school.  The rest has to be raised.  But there wouldn't be any money to donate if we are not first out in the economy creating wealth - which we can then share by donating to a school.  And you do not create wealth by ignoring value.  This is a central lesson our kids should be learning.

So let's go back to the assumption that the path to a four degree from a reputable school goes through acceptance and enrollment in that four-year university right out of high school.  In most parts of the United States, an alternative exists - the 'Community College' or 'Junior College'.  Part of the assumption I challenge here is a cultural message that the 'brighter' students go straight into a four-year university.  Again, this goes back to choosing to highlight that percentage or the percentage who graduate from a four-year university.

If I might be forgiven for a slight tinge of sarcasm - let's see how 'bright' the conventional path really is.  The first two years of college invariably involve the 100- and 200 series classes.  If you go to a large school - which is large mainly by virtue of being 'reputable' - many of these classes have upwards of 200 students in them and meet in a large lecture hall - on the very rare occasion everyone actually shows up!  It is also likely the lecturer will be a graduate assistant.  After all, the school is 'reputable' because the supervising faculty member is off doing some cutting edge research.  So the class is being taught by a graduate assistant who has little experience in the classroom and less, if any yet, in the field related to the subject of the class.

Now if you were to go to a Community College for these first two years, you will take the same 100- and 200- series classes.  You will be in a classroom with maybe 20-40 students, taught by someone who has a lot of experience teaching (because that is what they do for a living) and who likely has some real-world experience in the field related to the subject of the class.  And for that - compared to what you will spend at the reputable four year university - you will likely pay... wait for it...

$0.10 on the dollar.

After those first two years, having spent only $0.10 on the dollar, in many cases you will be well-positioned (sometimes by state policy as is the case here in California) to gain admission to that reputable four year university to complete your degree.  Remembering that the number which really matters is the percentage of students who graduate from a reputable four year university, let's now push past the second half of this college career and compare two students:

Student A went straight from high school into the reputable four year university.  Student A's parents were not well-off enough to pay for it, so Student A signed up for the student loans so assiduously 'sold' on college campuses today.  Student A successfully completed his four years and now has a Bachelor's Degree from that reputable university.  Student A also has (and this is the number - again - you will never see in those mailings) probably somewhere in range of $50K - $100K in student debt at interests rates significantly higher than the rates charged to the bank (by the Federal Reserve) for the money lent out.

Student B went straight from high school into the local Community College.  Student B paid $0.10 on the dollar during those first two years, and thus came out with the two-year Associates Degree with no student debt.  Student B transferred into the same reputable university and, like Student A, needed to take out student loans to pay for those last two years.  But let's say Student B learned something important along the way.  He noticed when he enrolled in the reputable four year university that he was exactly where his classmate - Student A - was, but he only spent $0.10 on Student A's dollar to get there.  That value lesson having been learned, Student B decides to work some to pay for things like books and supplies and general spending money.  He minimizes his debt to pay only for the bigger expenses - the tuition and fees.

So now we come to the Great Hall for the graduation ceremony.  Student A and Student B will both get the same Bachelor's Degree from the same reputable four year university.  Even before graduating, Student A's parents were paying for the pricey SAT/ACT test prep classes in the news today.  Student A was 'paying' as well, in a sense, by managing the stress of preparing for and taking the test (and all of the 'practice' tests offered by the school).  Student A was a 'bright' kid.  After all, he scored really well on the test and that is what the test tells us, right?  So Student A went straight into the four year "U".

Student B, though, reckoned that he could be in exactly the same place as Student A half-way through college and spend $0.10 on the dollar getting there.  And for having chosen the path through Community College, Student B was relieved of the stress of having to worry about the SAT/ACT.  And his parents were relieved of the expense of having to pay for pricey test prep classes.  Having learned to consider value when making educational decisions, once in the four year "U" he only borrowed what was needed for tuition and fees and now graduates with the exact same degree from the same school - with all of the same cachet the 'reputation' of the school confers.  Only he goes into the adult world with far less debt than Student A.

Again - with apologies if the question is perceived to be sarcastic - which one is the 'bright' student again?

There are a whole raft of cultural assumptions about higher education present today.  And they are carefully nurtured by the higher education and banking sectors.  The banks, in particular, are making a killing.  They pay around 1% for money they lend out to students at 6%.  And since student loans cannot be discharged in bankruptcy and are guaranteed by the taxpayer, they get to make this premium without taking any real risk.  While this has 'democratized' higher education to a certain extent, it also represents an inflation of the money supply available to the higher education sector.  And the inflation in tuition costs is the direct result.

I regularly interact with 20-something young people who work for local elected representatives.  And I hear the same story over and over again.  I hear how they would like to buy a home and start a family, but buying that home is out of the question what with their student loan obligations.  They drive the same beat up hand-me-down car they used in college, again, because a new car is out of the question for the same reason.  They cannot even take the very first step in creating wealth they might later be able to share - buying a home.

If we are genuinely concerned that our children graduate into the workforce with the knowledge and skills to be productive members of society - and to be able to create some wealth they can later share with schools, churches and other community organization, we simply must start calling out some of these assumptions - especially about the supposed prestige of going straight into a four year "U" from high school - and start asking some really tough questions about value in education.

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