Analyze Colleges Just Like You Would a Stock
More often than not I get the vibe that families in the midst of college review consider the ordeal a right of passage. It’s an unmissable experience. Just get in… the rest will fall into place. Sure… college is fun if you make the most out of it. Yes, it can take you on study abroad semesters and introduce you to lifelong friends. It may even mean a permanent change of zip code. But more practically, college is an investment in yourself. A means to an end, really. And given that fact, reviewing college options needs to be critically considered just as you would with any stock pick in your portfolio.
A college degree can equal higher paying positions which should accumulate to big bucks over the course of your career. However, with the cost of college rising roughly 7% annually over the past 50 years, it begs the question of whether salaries have kept pace to make the degree equitable. Therefore, it’s worth taking the college’s reputation, cost, degree, and expected salary into serious consideration before accepting a spot (maybe even before sending out applications). Even if your child doesn’t know their exact career path, certain fields generally have a better return on investment (ROI) than others which can help get them started down the right path.
What factors to consider when reviewing college options to make it a better ROI
- Pick a school you’re sure to finish within 4 years. Time is money. Dropping classes, switching fields, and potentially worst of all, switching schools can all add time for how long the degree takes to complete. It’s that much more time out of the workforce. That much more money invested into a single degree. This is a hugely understated reason for why so many find it difficult to repay student loans or complete their degree. If anything, flip the script. Take high school AP or extra classes over the summer to help propel the degree along that much faster. And if you’re intentionally planning to switch schools, (ie: community college for 2 years before switching over to a private 4-yr) make sure the idea is coordinated with your secondary school ahead of time so all coursework maps over as expected.
- Don’t overlook the schools that do backflips to welcome you. I’ve seen a trend of good but modest private schools across the country looking to take their brand to the next level (ie – University status). To do this they want students from across the nation and internationally, not just state locals. They may also be aiming to be the best or trying to develop a program for something you happen to excel at (music, swimming, debate, lacrosse). Yes, the best schools tend to have deeper pockets to decrease their sticker price, so it’s worth taking the chance to apply even if the price tag seems jaw dropping. But if they’re also a reach school, those endowment dollars may not be coming your way. Seriously considering the schools that want you vs only focusing on reach schools can ultimately mean a material discount on tuition.
- Do your homework on career paths and pay. Love graphic design? Talk to people in the industry to get a sense of how that degree plays out. What’s a career in it actually look like? Is a bachelor’s degree enough, or should additional education be expected? Armed with information, head over to glassdoor.com to type in some of these positions to see what a first-year salary and beyond could be. Is it what you thought? Does it make financial sense to pursue the degree? Or are you now thinking it’s worth keeping as a side interest with your career focus shifting toward engineering?
- Understand how the school supports your intended degree to make it a good ROI. Does the school you’re considering have a degree specific for your intended field, or is it very generalized? I often see majors in “Art” or “Business” which to me is very vague and almost signals that graduate work would be required. What employers recruit from the school? What’s the job placement rate? Do they coordinate internship opportunities during your time there? IE) If job placement and overall reputation is largely related to their popular nursing program, you may want to think twice about pursuing a history degree from there.