For parents doing the research on colleges for their kid, new data from Goldman Sachs should not be ignored. The research shows that not only do college educations often have a horrible return on investment for many students, but if the education system does not see dramatic change soon, it will get much worse.
It’s going to take longer and longer for kids to break even on their college investments. Goldman Sachs predicts:
- 2015 graduates won’t see their investment break even until age 31
- 2030 graduates won’t see their investment break even until age 33
- 2050 graduates won’t see their investment break even until age 37
As the cost of higher education continues to go up, so do the potential consequences. Here are three college problems for parents that may have you rethinking whether you want to send your kid to university or not.
- Leaving the Nest – Student debt often causes many students to become what is increasingly being called “boomerang kids.” Students leave the nest to go to school and then crippling student loans forces them to move back in with their parents and often stay there for long periods.
- Expensive Paper – Goldman Sachs’ research warns that it may be a waste of time to pursue that piece of paper for four years. The study also strongly cautions students to not attend colleges generally considered to be of lower quality because a majority of their graduates earn less than high school graduates.
- New Wave Education – Kids that spend four years at university may soon be finding themselves at a disadvantage as new online learning platforms are becoming more popular. Many experts expect there to be a shift in the future where employers will prefer candidates that have a recent certification through online platforms such as Lynda or MOOCs – which offer constantly updated, job specific training – rather than traditional college degrees.
Assuming that college is the only path to a successful career can sometimes lead to difficulty. The educational climate is going through a lot of changes, and very often parents are discovering that sending their child off to college is drastically overpriced and can actually be a disadvantage in some situations. Make sure to thoroughly evaluate all of your child’s options before choosing college.
