Recently I jumped on with the Jonathan and Brad over at the ChooseFI podcast to talk about side hustles, blogging, and probably most importantly – financial education in schools.
It turned out to be a really fun discussion that I've received a lot of great feedback on (you can listen to the whole interview here). Talking to kids about money was one of the reasons that I started this site, so it was cool to go back and relitigate what made me become so passionate about personal finance in the first place.
But after going back and listening to the interview, I realized that there was a lot of room to expand on what I said about kids and personal finance. Specifically, I want to dive into the “kids going to college” subject.
First of all, should schools push kids towards college?
This is always a tricky one for me to answer, but I think it's an important question that we should be discussing more often as a society. We've all seen the outrageous numbers surrounding “The Student Loan Crisis.”
While everyone is focusing on Bitcoin and Financial Independence right now, I'm still way focused on the thousands of readers that have sent me messages over the past few years that are completely buried in student loans with no light at the end of the tunnel.
Should I refinance? Which loans to I try to pay off first? What do I do if I can't make my payments? My loans are in default…what do I do? Should I consolidate? How can I make more money to pay my loans off? Should I pursue loan forgiveness?
You get the point.
We're at $1.3 trillion in student loan debt right now, and obviously, it's just going to continue rising in the coming years. Public school systems have been churning out bright-eyed college enthusiasts like a factory with very little regard to the actual business of paying for the experience.
I know I see these stories more often than the average person – but they still scare me. I don't see a viable way out of this mess. Quite honestly, I don't even see a potential solution to the problem at this point.
As a country, we are buried up to our eyeballs in student loans and every year more 18-year-olds are picking up a shovel and joining the fun.
We haven't even mentioned the lack of trade jobs yet…
Outside of the ugly business of student loan debt, there's another problem that's going to surface throughout the age of Millennials ruling the economy. We don't have enough people to do the jobs that take a legit combination of knowledge, skill, and elbow grease.
It's actually pretty well documented at this point. The massive focus on college educations by our society over the past few decades has created a shortage of the trade jobs.
Plumbers, electricians, HVAC techs, you name it.
A lot of these jobs pay very well and have the opportunity for growth (either through upward movement or entrepreneurship).
According to PBS, there are an estimated 30 million jobs that pay at least $55,000 per year and don’t require a bachelor’s degree.
They also don't come packaged with massive debt, which is a nice perk right?
So on the surface, my gut is to say no to the original question. School districts need to do a much better job of pushing trades and chill the heck out on the conveyor belt to college approach.
But then there's the rub – college educations are undeniably valuable.
Every time I wrestle with this topic, I always have to remind myself that I went to college. I had student loans and beat them, and in the process came out with an education.
If I hadn't gone to college, I wouldn't be who I am today. Just the fact that I'm able to write decently and run this site probably has something to do with the hours of writing essays in college that I legitimately hated doing.
Having a college education is a massive asset. It allows you opportunities in life that you may have never had and opens paths to making more money (assuming the degree isn't worthless…we'll get to that shortly).
Personally, it also gave me something that I rarely talk about on this site.
A safety net.
When I quit my job to run M$M, my wife and I had about a year of my salary saved up. I usually give that chunk of cash the credit (see what I did there?) for my ability to take a leap of faith into the unknown.
But I also have a degree. Even though I knew I didn't really want to be a band director anymore, I also knew that if times got really tough there would at least be some kind of job out there for me.
Maybe I would have to go to a different state, or maybe I would have to teach choir instead of a band (yes, I'm technically certified to teach choir and orchestra even though I can't sing or play a violin haha).
The degree, along with the money, gave me the ability to take risks that I would never have felt comfortable doing without it.
So who am I to say that kids shouldn't be getting degrees? I have one, and ultimately it led to me nearly quadrupling my old teaching income over the past two years.
Maybe it isn't pushing college itself that's the problem, but the message that our schools mistakenly combine…
This is actually something I think about a lot, and in my opinion, it's really at the root of the entire issue with our current system. It's not necessarily that college degrees are inherently bad (although they are stupidly expensive for reasons that I've written about before).
Maybe it's not so bad that we tell kids they need a degree at an early age. Maybe it's a good thing that schools host parties for the seniors after they choose their college to congratulate them on their upcoming journey.
The problem is that our education system mistakenly intertwines the messages of, “Follow your dreams, you can be anything you want”, and, “Go to college; it's the only way to be successful.”
Can you imagine how confusing that is for a sixteen-year-old kid?
They have the whole world in front of them. Anything is possible. They can literally be anything and do anything in their lives that will make them happy.
But they need to figure out which major accomplishes all of that crap right now because they're almost seniors in high school and if they don't go to college they'll be flipping burgers for the rest of their lives.
Then the colleges play right into that reality by offering up degrees that aren't necessarily a gateway to a solid job (enter gender studies degree stereotypes here).
College isn't a place to fulfill your wildest dreams. It's a place where you go for job training. I think our education system doesn't do a good enough job separating the two ideas.
So what's the answer? Free college? A push for more skilled labor training? Do colleges need to get rid of the amenities and bloated administration salaries and cut the cost of degrees?
I don't know. I wish I did.