My brain just locked on to info in a recent tweet from Brandon Dutcher about Kelli Space who writes about trying to pay for the 200k in student loans used to earn her Sociology degree. The sad news is she’s only 22. And even sadder: she didn’t land a job even remotely related to her field of study. She is working for an internet company. She seems to be acutely aware that in this economy and at her payscale, her long-run financial forecast is abysmal.
It’s criminal that an 18 year-old could be encouraged by high school and college financial aid counselors to take on this kind of debt when the payoff from her degree amounts to about ten percent of the loan “if” she got a job in sociology. After doing some basic research about what her alternatives could have been, she concludes that any path out of high school would have been better than the one she bought into. She writes:
An idea that some students may want to consider is going into business rather than going to college. Peter Thiel, billionaire co-founder of PayPal, recently launched an initiative to encourage students under 20 years of age to focus on their entrepreneurial ideas as opposed to dutifully fulfilling the expectation for college. The Thiel Fellowship offers $100,000 each to twenty young people who are willing to put their education on hold in order to pursue these ideas.
Thiel understands that the massive amounts of debt that many students incur by the time they graduate is so burdening that while they spend their lives paying off the borrowed money, they have neither the drive nor the means to tend to other worthy pursuits. Only a few can get these grants, but his idea has much wider application. I suspect there are quite a few ambitious young Americans who would be much further ahead if they went into a business or trade and saved the money their families would have spent on college tuition.
Thiel’s fellowship coupled with my personal Mt. Everest (my hefty student loans) has opened up a world of regret for me as I look back and recognize all of the options I left unexplored at the age of eighteen. I often dream of how I could have worked full-time and gone to community college part-time while living at home, saving money, and paying my own way through school.
Maybe I could have worked while taking foreign language classes (another interest of mine) and, once fluent, applied to become a translator. Honestly, nearly any path after high school would have been better than amassing $200,000 in debt for an assumed rite of passage.
It’s obvious that we’re in the midst of a higher education bubble which is about to explode. Simple enough: not enough jobs for all the kids graduating from college. Perhaps parents should get off the college brainwashing train. One of my favorite books on the topic is Robert Kiyosaki’s If you Want to Be Rich and Happy, Don’t Go to School.
No responsible parent these days should let their child take on loans to go to college. But, what about giving some consideration to laying the groundwork for your children to start their own businesses ? What about taking money that you’d put in a 529 account and instead using the money to buy capital for their business ? By helping your children build entrepreneurial skills and investing in capital for their business, you’re investing in their futures as well as your own. Not to mention, you might be able to keep them local instead of having them chase jobs all over the country.