There has been a lot of buzz recently about the sky rocketing cost of getting an education in the United States because, most recently, there is talk about the Government stepping in to do something about a proposed doubling of student interest rates.
It’s worth nothing that not too long ago, student debt exceeded credit card in the United States.
Read that sound bite again, I’ll wait.
Student Loan Debt > Credit Card Debt.
The Entrepreneurs Dilemma
If you knew me back as an 18 year old, back in 2006 you might have chuckled.
You see, I was running quite a profitable business drop-shipping 200-300 laptops per day on eBay and all was right with the world.
I was even having to hack the school filter to run my business (and then I sold access for others to get around the filter for a quick buck too since I had setup my own proxy server at home haha).
The point of telling you this was that, for an 18 year old I was making way too much money. It’s not to brag, but rather to give you context.
I was 18 and “crushing it”, but it had been beaten in to me that to be successful there was a way of going about things.
1. You went to College and got a respectable degree
2. Good jobs were supposed to be easy to come by, and you work your way up
3. It didn’t matter how much school costs, you were just supposed to do it
This couldn’t have been any more misleading. Did I have a great experience at school? ABSOLUTELY, there are definitely perks to doing it.
BUT, were those perks worth the current cost of entry? I’d say for at least 50% of people going to school it’s a horrible financial decision.
With college tuitions raising 8-16% per year and loan rates proposed to double.. When will people weigh entrepreneurial opportunity costs?
— Travis Ketchum (@travisketchum) April 24, 2012
More Education = More Opportunity… Right?
There are extremes to everything, and for some degrees higher education is essential.
I don’t know about you, but I probably don’t want the High School drop out doing an organ transplant for me.
So what about all the less technical degrees like advertising, marketing etc?
I think we are in for a big fundamental shift in the way candidates are selected for positions in the near future, and in a lot of areas it’s already happening.
No degree? No problem, just prove that you have drive, experience and creative thinking.
Organizations are going to start caring more about hiring creative winners than they will about hiring “well educated” personnel.
Think I’m kidding? Take a look at where the money is flowing these days and you’ll see what I mean.
Kids are getting millions in funding for awesome inventions, drop-outs are getting backing from some of the smartest investors in the business right now, and our biggest champions of industry in the past 30 years have almost all been drop-outs themselves.
Be Smart About Your Experiences
In days gone by, higher education was more about expanding your mind and being a well-rounded individual.
At some point in the process though it turned into a race for specialization into particular professions and professor salaries bloated.
Now with tenure the low producing professors can’t be swept away and there are major financial cracks in the funding model of Universities.
My question is, if being around a bunch of other smart people is the enlightening part of College and where the real value is, do you need a degree to prove that you’ve learned something intangible?
I feel like most people fall into one of three categories, based on my experiences.
1. Technical interest that requires more education
This individual is going to school for all the right reasons, and can justify the expenditure because of the earning power that these types of degrees typically yield.
These types of professions include things like any medical field (doctor, nursing etc), high technology (computer science, electrical engineering), and other highly technical jobs.
2. Looking to really do a vocational job they enjoy
These types of people would actually best be served by focused vocational schools, and not by the costly four year programs most end up doing.
Plenty of people could make a return on their school expenses by going to a super focused school and skipping most of the classes they are never going to need or use.
3. Hoping to be an inspired entrepreneur
This third and final group is the one that really speaks to me. These people are the entrepreneurial sprits that execute on new ideas by starting new business and taking risks.
Entrepreneurs I feel are the least served by putting down serious money and being saddled with debt for an education.
Having been through the ringer so to speak in a 4 year program (which was wicked fun), and then trying my hand at the corporate world (I made it 9 months before I was ready to claw my face off.. needless to say I jumped ship to do my own thing).
I’d have to say that if the thought of running with a lean team to build something cool gets you going, then maybe taking the risk on running your own business is a better bet.
Think about it, if the average student who would of went to school for upwards of 70k (at a public school, which is the current prediction last I checked) and instead spent that on smart moves in building real marketplace value they could have amazingly different returns. They don’t wait for someone to make a decision and hire them, which they’d probably hate anyway.. instead they don’t ask for permission, they just change things.
What’s the worst that could really happen? Even if you blow the same amount as tuition, in my opinion you’d still have more at the end of the run than you would at the end of a college degree.
You’d have tangible experiences and would have learned, first hand what does and doesn’t work so you can avoid those mistakes when it comes to running things for someone else.
In the new order of things, most people are only going to care about experience – the kind of experience you can only get by doing instead of listening.