Making College Pay Off

November 26, 2018

Career / Business

A good education may be the best investment, but it also requires a lot of money. Gila Dworkin decided to get a BA degree, which would allow her to keep a well-paying position in an exclusive private school. However, headlines about the runaway inflation of college tuition left Mrs. Dworkin concerned about affording a degree. These articles seemed to say that earning a college diploma today could cost as much as $100,000-$250,000, and her colleagues were always struggling to put away money for their children’s college funds. The Dworkins had no such fund, but Gila knew that many frum people of modest means had earned their degrees.

Obviously, there is another path to affording higher education. But what is it?

Pursuing your Options

Assuming that university is too expensive based on alarmist numbers is like saying that cars are unaffordable because Lamborghinis cost $400,000. Very few drivers buy luxury Italian sports cars, and most of America’s 20 million college students do not spend on a “luxury” education. The cost of college varies tremendously by the institution, years of attendance, and the level of services a student expects to get from the school. There are also extensive amounts of grants and scholarships built into the system, and whatever cost is left can be financed at affordable rates and terms. By untangling the different elements, Mrs. Dworkin will see that college can cost a lot less than she fears.

Comparing College Degrees Costs: “Lamborghini” vs. “Camry”

Comparing the full “Ivy League experience” to other options helps highlight the tremendous variations and complexity in university pricing. Rutgers, a highly respected public state university, has tuition costs 70% lower than Princeton’s (Rutgers’s $14,372 annual vs. Princeton’s $47,140). The “sticker price” for college also includes charges for room and board. Rutgers not only charges less for this than Princeton does ($12,260 vs. $15,610) but unlike Princeton, it is common for Rutgers students to continue living at home, avoiding the room (and most board) charges entirely. A Rutgers student living at home can then earn his degree for under $60,000 while the typical Princeton student will face a full price of $251,000. The wisdom of paying quadruple the price for the prestige associated with Princeton’s status is very questionable.

Adding Scholarships to the Picture

However, just calculating the full price of the degree leaves an incomplete picture of the actual cost of attendance. Each school provides differing levels of grants and scholarships and very wealthy schools like Princeton can often offer full scholarships to worthy students making the Lamborghini option less expensive than the Camry! The challenge of navigating the student-aid process is that usually the level of funding to be provided is unknown until after a student has been accepted to a program and an aid application is processed. This leads to a circular situation: the student can’t know which school options are best for them unless they know the assistance offered by each which they won’t know until they decide on their choices! Researching education paths can, therefore, be very time-consuming and frustrating but is crucial for improving the chances of getting the desired results at an affordable price.

Hacking an Education

Luckily for Gila, technological shifts and educational attitudes have opened multiple routes for low-cost yet quality colleges. Even Ivy League institutions have bowed to the inevitable, and many offer online courses at a fraction of the cost of in-person classes. Many frum organizations have pioneered slimmed-down educational options. These focus solely on improving career prospects rather than including the cost of sports and recreation programs, mentoring, and research facilitation. These creative degree paths utilize credits gained in yeshiva or seminary, and offer additional inexpensive credits based on tests for other subjects. With this tachlis approach, and in partnership with secular institutions that respect this focus, degrees can be earned for as little as $10-$20,000: a substantial bargain. Even if someone wants to gain his credential from a more prestigious institution, they can still earn many inexpensive credits online or through testing which may be transferred to the desired school for a final year of study.

Making the Best Choice

This reduction of college to its proper place of being only “a spade to dig with” makes it much more affordable. Another benefit to streamlined education is the reduced time commitment required. In addition to the direct cost of a degree, there is an “opportunity cost,” that is the loss of wages that could have been earned during its attainment. Due to the much greater time commitment needed at a traditional college, the opportunity cost can easily add $100,000 or more to the net cost of the education. The combined cost advantages of a streamlined degree make it a compelling choice that can yield an excellent return on investment. Regardless of the path chosen, however, the rule of Caveat Emptor (the buyer must be aware) remains. The degree providers ultimately serve their interests, and it is up to the consumer to do their homework and make the right decision.