Don’t Attend College?

Conventional wisdom (and the College Board Company) says that you wind up earning more for every year of higher education that you complete. On the face, this is a decent assumption. But is it really true? Leave it to an economist to determine: not so much. The College Board maintains that it takes 14 long years before the college grad’s income, net of loan payments, starts to beat what the high-school grad earns. During all those 14 years, college doesn’t pay. High school pays. When you start factoring in the costs of borrowing (which kind of sucks right now), how much you borrow, the fact that you derive less Social Security benefits as your income increases, same goes for Medicare, and you will most certainly pay more taxes (at higher rates) when you earn more. And remember, you’re giving up at least four years of earning when you attend college (usually). Economist Laurence Kotlikoff at Boston University created a nifty piece of software called ESPlanner that pretty much figured out that over a lifetime, it’s a wash. Go figure.


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