College is costly. That's a fact. See Shrinking Financial Aid Curbs Impact of Slowing College Tuition Increases.
And making an already big problem an even bigger one is the simple fact that far too many students never graduate while accumulating a boatload of student loan debt in the meantime. And many of those who do manage to finally graduate leave their college years behind both unprepared for the workplace and heavily indebted. That sets up a future of financial pain.
So here are two related questions in need of answers --- (1) Is college, as is widely believed, always or even generally a wise investment in both time and money (especially when the money is borrowed)? (2) Should the graduating student reasonably expect to realize an adequate financial return on the total investment in terms of both time and money?
Return on investment is a simple concept. Time and money is invested now in order to get a solid return on that investment in future years. The expenditure or outlay comes now with the payback occurring later in life.
As part of that process, college students often borrow money and spend several years attending college to earn that coveted degree.The problem with determining the return on investment is that the payback comes later but the expenditures take place in the here and now. Thus, some degree of speculative activity is involved in going to college, as it is with any investment.
And the less prepared the new student is when entering college, both academically and financially, the more likely it is that the student will not graduate on time or ever, for that matter. That in turn means more debt and less future lifetime income than expected when the initial enrollment and borrowing decisions were made.
Paine College is a small church-related liberal arts HBCU (Historically Black Colleges and Universities) college located in Augusta, Georgia. While more costly than the local public Augusta University, Paine is having big problems meeting its current payroll obligations. As a result, it is reaching out to the broader community for emergency and ongoing financial support.
But what about the students at Paine? Would they be better served by doing something else with their time and money, including transferring to a less costly college?
An overview of Paine College presents the following facts:
"How Many Students Make it Through . . . ?
At Paine College, 325 undergraduates were scheduled to complete their degree in 2013. Did they? Let's find out...
There's a Good Chance You Won't See Many of Your New Friends Next Year: Low Freshman Retention Rate
You have to make it past freshman year, in order to make it to graduation. With only 52.0% of students staying on to become sophomores, Paine College has among the worst freshman retention rates in the country. . . .
Among the Worst Graduation Rates
Only 5.5% of students graduate from Paine College on-time (two or four years depending on the degree) and only 22.2% graduate at all, ranking this school among the worst in the country in both categories.
Based on the caliber of students that attend Paine College we would expect an overall graduation rate of 27.5%, however, students are graduating at a rate that is 5.4% lower than that. Therefore, Paine College is performing below average at graduating students, based upon those students' anticipated academic achievement in college.
77.8% of students at Paine College failed to graduate within 150% of the expected time. The majority did so because they dropped out."
Facts are stubborn things.
Too many kids enroll in college unprepared to do the work academically, but the colleges take their or the government's money anyway.
Is borrowing or loaning money so the student can attend a specific college a good investment? What if there's only a 1 in 20 chance of graduating on time? Or a 1 in 2 chance of dropping out and not returning for the second year? Or no reasonable assurance that there will be a good job upon graduation, even if the student proves to be that 1 in 20?
Do colleges like Paine exist primarily to serve the students or the faculty, administrators and employees?
Does making available government money in the form of grants and loans do more to help the indebted students or is it primarily to benefit the college and its employees?
Is providing a first class education more important to many college officials than simply getting enough paid butts in the seats?
I know my take. What's yours?