Before You Choose That Credential...

Jason Fertig

The Wall Street Journal recently ran a piece titled “Before You Choose That College” that intended to help parents “get the biggest bang from their education bucks.” This article gives five sound pieces of pure financial advice, but I caution readers – read the advice with an open mind. While the final tip on healthcare is sensible, following the first four tips as stated may do more harm than good. Consider my proposed alternatives.

WSJ Tip #1: Encourage your child to select a career first, and then a school.

Fertig Revised Tip: Encourage your child to select a career first, and then determine if a four-year school is necessary.

Fertig Revised Tip Corollary: Solely focusing on careers may lead you to spend money on a school that preaches values that are contrary to the ones you taught him.

According to Greg Gilbert, an Atlanta-based financial advisor, “College is preparation for a career….Thinking about career options helps children focus their college experience.”

This is the accepted line that drives a large portion of students to enroll in college, even while everyone from Richard Vedder to Paul Krugman questions the worth of investing in higher education. For many students, the supposed wage premium for holding a degree is too much to pass up. They think that they are buying a form of unemployment insurance – when they seek a job, they are banking on the degree to open doors.

That’s why many students seek the cheapest college degree they can find, believing that any degree will put them on a track to success. But the cheapest college is not necessarily the best "education."  If someone wants a cheap credential, that's fine - get it cheap, but it's not always the same as education. The WSJ article discounts the value of a stimulating academic environment, honor codes, traditions, community, and camaraderie that exist at many “pricey” private schools.  While a student can get an accounting degree at many colleges, studying it at certain schools provides intangible benefits that cannot be measured solely in dollars and cents.

I cannot put an economic value on the joy that is gained from real education. Martial arts black belts say that once the belt is earned, the time for real learning begins. If students just want a credential, what will they do once they have it? What is the result of a generation of students never reading a Shakespeare play, listening to a Beethoven symphony, studying philosophers’ answers to the meaning of life, or simply reading something that is not “for the test”?

WSJ Tip #2: Don't promise your child you'll pay the entire tuition.

[combined with]

WSJ Tip #3: When deciding between an in-state public university on the one hand and a private university or out-of-state public university on the other, make your child responsible for at least some of the costs of choosing the more expensive option.

Fertig Revised Tip: Make your child pay some or all of the first year’s tuition.

The financial advisors in the article send the message, ‘if you go to that out-of-state school, it’s expensive so be aware of that.’ From my own experience, as well as from discussing this topic with many students, I find this advice quite shallow. The CNBC debt documentary from late last year showed examples of starry-eyed students who could not process what it meant to pay for school until it was too late; some of those people had loans in the six-figures. The notion of telling a high achieving student that community college or State U can be a better investment than the swanky private school he has in mind is only effective in influencing school choice if that student is financially mature at 18 – which is not as common as I wish it would be.

I stand by my analogy that I made when I wrote on the CNBC program for this site - the reality of paying for school is akin to a second-grader thinking about married life.

Subsidized loans further cloud the payback process. Many students do not receive a loan bill until after they either drop out or graduate – college seems free to them when they are enrolled.

Regardless of school choice, if students are borrowing money, that money needs to seem like real money to them. Giving them some responsibility towards the first year’s tuition will make paying for college a reality versus something to “worry about later.”

WSJ Tip #4: Make a deal with your child: Underperform and you’re out.

Fertig Revised Tip: Make a deal with your child: Grow up or you’re out.

Donald Duncan, a certified financial planner in Illinois, says that “going to college should be considered the child’s first real job, and job success should be defined by the child’s GPA.”

If the child has not had a real job before college, what will he learn in business classes? 

When I was interviewed on NPR last summer, a caller rightly chastised me for calling college students “kids.” If they are old enough to vote (separate issue there), they should be called adults.

Getting the most out of college involves acting somewhat like an adult. It is a student’s responsibility to learn – most professors don’t track down absent students to tell them what they missed in class. Additionally, college offers numerous opportunities for hedonistic pastimes that, in the short-run, seem exponentially more pleasurable than higher learning. The recent voyeuristic event at Northwestern showed that such activities are not limited to fraternity parties. Without a set of mature values, the highs that such students get at college can overshadow the rest of their lives and inhibit the rewards of marriage or family life because “it doesn’t compare to college.”

While prolonged fun does not lead to long-term happiness (see Woods, Tiger), I do not suggest that students strap on the chastity belts and hide in the library. But they need to realize that grown-ups know how to work hard and play hard.

And in regards to GPA, if a student knew that his parents would pull funding for low grades, that’s a strong incentive for him to opt for easier paths to the dean’s list, such as Education or Special Studies, instead of STEM or other challenging subjects.

Plus, as much as I try to make my grading a valid measure of what I want my students to learn, I’d rather my kid be a mature C student than an immature A student who only cares about grades. Those grade-grubbers are the ones employers hate because they treat work like school – asking how to do every little task just like asking a professor “what’s on the test?” In addition, given some of the PC drivel that is needed to pass exams in higher education today, I’d be proud if my child failed to learn some of it.

Navigating the finances of college is a major part of the battle, but it is not the whole war.

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