“Overpriced College Degrees” – A rant by Joseph Sangl

I am SO sick of hearing story after story of people who obtained a worthless college degree and have nothing but $60,000 in student loan debt to show for it!  I am even more sick of hearing stories of people who did not even obtain the degree and have piles of student loan debt to show for it!

As a person who teaches about personal finances to thousands and having counseled hundreds of people one-on-one, I see situations of immense student loan debt nearly every single day!!!

Here is how the situation unfolds.  The individual graduates high school and really has no clue about what they want to do with their life.  They end up attending a very expensive private school and obtain a degree that has low market demand.

How did they pay for the education?  They financed it!!!  Now they are in a position of huge debt and have a degree that won't support the debt.  Even worse, they don't even finish the degree!

I know that the private school education may be prestigious, but there are very few instances where the private school education is any better than a great state school!  And the prices are way better at the state school!

Consider this.  I attended Purdue University and received a fantastic mechanical engineering degree.  This degree is in great market demand, AND it was VERY CHEAP since Purdue is a state school!  I then studied at Clemson University and received my MBA.  This degree is in great market demand, AND it was VERY CHEAP since Clemson is also a state school.

I had the option of attending a private school for my engineering education.  Even with the incredible amount of "scholarship" offers, I would have had to pay TWICE the amount of full-price at Purdue!  For a private school MBA, I would have had to pay FOUR to EIGHT TIMES the amount of full-price at Clemson!

Listen, I want you to get an education.  I want you to get that degree!  But please consider the overall cost of the degree!


PS – Student Loan Debt is not bankruptable.  You WILL have to pay it back someday.

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  1. Brian Baute on October 12, 2007 at 5:43 am

    Great post (and go Boilers!). I work at a private university and see case after case of students doing exactly what you describe. A friend of mine did the same thing and graduated from a prestigious private university with a degree in elementary education. Ten years later she’s still teaching in a public elementary school (and loving it) but working part-time at a grocery store to keep paying off her student loans.

  2. […] Not exactly Ann Arbor specific, but very important for students. Make sure your degree can justify its own expense. […]

  3. Ultim8grafix on October 12, 2007 at 8:21 am

    I would have considered this advice if I had known about “going to college” beforehand. I was the first member of my family to go on to ‘higher eduction’. My parents nor I knew anything about college expenses — we just knew it was a lot of money and we thought everyone had to finance it. Unfortunately, my parents were never that well off financially, and never saved for me. Also, my wife was in the same boat. Her parents are divorced and she, too, was a first family member to go to college without a clue. She financed more than me. Together, we have over $55,000 in student loan debt. And, to add insult to injury…we’re not getting paid what we should because what we majored in isn’t doing that great in the job market right now. So sad…so depressing. 🙁 But, WE’VE GOT GOD!!! And, he helps a lot! 🙂

  4. Moneymonk on October 12, 2007 at 8:29 am

    I with you Joe. I wrote a post similiar to this awhile back.

    I feel that you should make at least the same amount of more the first year out of college as your student loan debt.

    In other words, if you have $60K in debt, Your salary should be near that the first year after you graduate that way you will get the return on your investmest.

  5. jane on October 12, 2007 at 9:46 am

    Joe…. I am soooo with you! It breaks my heart to see teens/twenty-somethings in college for the sake of being in college. And the degree gets them nothing but flipping burgers or waiting tables. They could have done that WITHOUT all the school debt!

    Jack went to one year of community college, quite, worked in various jobs, then after 7 years of being out of high school, THEN went to pharmacy school! Not necessarily what he will be doing the rest of his life, but sure does pay the bills and he can get a job ANY WHERE at ANY TIME!

    Choose your profession wisely!

  6. Julie on October 12, 2007 at 11:40 am

    Amen! Every time I see one of those commercials advertising up to 40k PER YEAR loans for college students I just CRINGE! Hubby and I both attended a Christian college which was more expensive than in-state. But we chose one of the least expensive Christian colleges (John Brown University). Then he opted to join ARMY ROTC to pay for his tuition. Between the two of us we only had about $9,000 in loans to pay off when we graduated. I am SOOO thankful for that!

  7. Hsm on October 12, 2007 at 1:06 pm

    A “better” education at a private school or university is always worth the extra debt. In my field I regret attending a public university right now I’m only bringing home 6000 a month. The people that attended “better” universities on average make 9000 dollars a month here in my company, same role, same experience.

    And believe me, to a boss or manager, its all about where you went to school and who you know…

    And I’m not sure where you live but in the world of business a degree is a must, I’ve never heard anyone complain about their student loan debt or the education they received. Student loans are usually the lowest debt on a family’s budget, with the lowest interest and you can usually repay those for 20-30 years, at the rate the dollar is falling and with inflation rising you can literally wait, pay the minimun now and in 20 years pay it off with 1 paycheck.

    Our current student loan payment is 121 dollars on a 20,000 loan with 2.2% interest, on 30 years schedule. We bring home 10,000 a month, 121 dollar payment is nothing, and we usually just make one big payment in January and forget about it for the rest of the year.

    Again, I wish I had gone to Harvard or Stanford, I could be making way more!!!

  8. John X on October 13, 2007 at 7:08 am

    Then again – the above poster is relating to the record low interest rates of the early 2000’s. We were lucky to have rates that low. As of this past year, the interest rate on Federal Stafford loans is FIXED, not variable @ 6.8% & the PLUS is even higher. The 30-year payback is also including a Federal Loan Consolidation – the payback on traditional student loans is 10 years. While I agree that a business degree from Harvard, Stanford or Penn will make a difference, it is my opinion that there is very little to be gained by attending a #30 school vs. a #120 school. My 2 cents…

  9. Rich on October 13, 2007 at 2:52 pm

    Obtaining a college degree and/or graduate degree is somewhat akin to a high school education a few years ago, or an 8th grade education mid-last century. All are/were (generally) indisputably necessary.

    While I attended private universities for both undergraduate and graduate degrees, I don’t believe the education was greater than the public universities in my state.

    Both degrees were obtained while working full-time, married with children. I also managed to pay as I went and graduated with absolutely no debt. It all comes down to sacrificial giving and living.

  10. Jeff Baiocco on October 21, 2007 at 8:08 pm

    Joe, here is a link to an article that expounds on exactly what you are talking about. I think the debate rages on!


  11. jsangl on October 22, 2007 at 7:00 am

    Sangl says …

    Jeff B. – One thing that really made the taxes stand out to me was the use of Microsoft Money and entering my entire gross income and taxes. At the end of the year, I pull up a spending report and UNCLE SAM always is 1st on my list. It really makes me want to VOTE EVERY SINGLE TIME I HAVE THE OPPORTUNITY!

    Thanks for the great comment!

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