College or Home

To those of you who know our family, it won’t be any surprise to learn that none of our children have chosen to pursue a college degree at this time. And even though my wife and I both have college degrees (17 years of university between the two of us) we are not alarmed or disappointed in the least.  And here are some reasons why:

• The knowledge and skills they use every day in their work is not taught in universities.
• Their potential to earn more wouldn’t increase if they had a university degree, and
• Their time used to pursue a university degree would stymie their current earning capability.

This aside, many people do pursue a university degree and in doing so, according to the New York Federal Reserve, decrease their possibilities of owning a home.  In fact, “35 percent of the recent dramatic decline in home ownership can be explained by the rising piles of loans millennials are taking out to finance their education.”[i]  Despite the low interest rates that have been available on home mortgages since 2008 and the multiple first-time buyer discounts the federal government has made available for millennials, home ownership is declining.

“This lack of demand for new starter homes has pushed homebuilders to focus on move-up and luxury home building[ii]” making the market even tighter and more difficult for first-time home buyers.  And all for a silly piece of paper that certifies you went to school and paid a lot of money to somebody else for that piece of paper.

Think about it.  Less than 3 out of 10 college grads work in the field of which they studied in university.[iii]

And those who do get employment, only 6 out of 10 really needed a college degree to land their job.[iv]  There is a greater chance, even though slightly, to land a job with a university degree in a larger city, but the cost of your living expenses will increase as well making such a move less practical than first thought.

And here’s another anecdotal piece of data.  In a recent conversation with an acquaintance we discovered that she can work and get paid for five years, earning the experience necessary for a higher paying job with the same employer; or she can pay for college tuition and earn a bachelor’s degree to qualify for the job she is hoping to get.  So, you decide.  Should she earn $25,000 to $32,000 a year while getting the experience necessary for the higher paying job or spend $25,000 to $33,000 at the university for a bachelor’s degree and hope for the best?   The solution seems too easy.

All said and done, college is not what it is made out to be when it comes to earning more money or landing the job of your dreams.  Of course, if you intend to be a doctor, lawyer or some other professional, attending a university may be the only option for you.  But, there are few jobs today which require university degrees. And the debt you will incur at university does rack up.  Meaning, it may not be in your best interest if you really want to purchase a home and live in the part of the country you desire to live in, to go to college.

Don’t get confused by those in academia.  The world doesn’t revolve around what you learn in college.  It revolves around those who create value for others.  If you can find something of value that you can create or provide for others, you will never have to worry about money or the home you live in.

[i] http://www.newsmax.com/Finance/StreetTalk/student-education-debt-housing/2017/07/13/id/801518/

[ii] ibid

[iii] https://www.washingtonpost.com/news/wonk/wp/2013/05/20/only-27-percent-of-college-grads-have-a-job-related-to-their-major/?utm_term=.415757259b1e

[iv] ibid