Episode Guide

Episode Summary:

Exploring the evolving landscape of higher education, this episode dives into the critical evaluation of college ROI, focusing on whether college is still the 'guarantee' to success it once was. As the financial burden of attending college surges, considerations around skills and alternative pathways to well-paying jobs have gained traction. Listeners are encouraged to consider not just the financial implications but also the purpose of their education \u2014 whether it\u2019s the college experience or acquiring necessary skills. Options such as travel rewards for education, merit scholarships, and innovative programs like dual enrollment and CLEP testing are discussed. With insights from various guests and listener feedback, the episode emphasizes being proactive in evaluating educational paths and making informed financial decisions related to college, possibly circumventing traditional routes altogether.

Episode Timestamps

ChooseFI Podcast Episode Show Notes

Episode Title: Evaluating the ROI of College Education

Episode Summary:
This episode delves into the return on investment (ROI) of college education in today's world. With skyrocketing tuition costs and stagnant earning potential, hosts Jonathan Mendonsa and Brad Barrett encourage listeners to evaluate college as a financial investment while exploring alternatives like online courses, community colleges, and skills-based programs that can lead to high-paying jobs with minimal debt. The discussion includes strategies for maximizing educational benefits, securing scholarships, and emphasizing the importance of practical skills over degrees.

Key Topics Discussed:

The increasing costs of college and the implications for students today.
Evaluating the ROI of college education.
Alternatives to traditional college pathways (e.g., online learning, community college).
Strategies for maximizing scholarships and lowering education costs.
The evolving perception of education: skills vs. degrees.

Timestamps & Discussion Points:

Podcast Intro
The Cost of College
- College tuition has dramatically increased without a corresponding rise in entry-level salaries, prompting the need for careful ROI evaluation.
- Key quote: "To secure middle-class status, attending college was once essential."
- Exploring the true costs of education and the reality of student loan debt.
- Discussion on how cash flowing college is no longer realistically possible for many families.
Scholarship Strategies
- Emphasizing the importance of applying for both large and small scholarships early.
- Actionable takeaway: Seek scholarships early and often; don't overlook smaller opportunities.
Alternatives to College
- Discussion on non-traditional pathways, including dual enrollment in high school and CLEP testing.
- Encouragement to explore skills development through alternatives like the Salesforce certification program.
- Actionable takeaway: Explore CLEP testing to fast-track your degree.
Conclusion and Final Thoughts
- Recap on the value of practical skills over degrees and the importance of lifetime learning.
- Final encouragement to challenge the norm when considering college education.

Actionable Takeaways:

Consider dual enrollment programs while in high school to save on college expenses.
Explore CLEP tests as a way to gain college credit efficiently.
Investigate diverse scholarship options and apply to a variety of scholarships to maximize funding opportunities.

Key Quotes:

"By understanding ROI, we can make better decisions about our education." -
"Practical skills outweigh the prestige of schooling." -
"Degrees aren't necessary for six-figure salaries; it's all about skills!" -

Discussion Questions:

What are the true costs of a college education?
How can we better prepare our children for financial independence?
What skills do you think will be most valuable in the future job market?

Related Resources:

FAQs:

Q: What are some effective strategies for maximizing scholarships?
A: Explore various scholarship types, apply to both large national scholarships and smaller local ones, and ensure you meet deadlines.
Q: Is community college a viable option for saving money?
A: Yes, community college can be a cost-effective way to earn credits that transfer to a four-year institution, significantly reducing total education costs.
Q: What is the role of skills in today's job market?
A: Skills are increasingly valued over degrees, with many employers focusing on candidates' capabilities rather than their educational background.

Podcast Extro:
"You've been listening to ChooseFI Podcast, where we help middle-class America build wealth one life hack at a time."

Unlocking Financial Independence Through Education: Rethinking the Value of College

Understanding the ROI of College Education

In today's fast-paced economic landscape, reevaluating the return on investment (ROI) of a college education is essential for prospective students and parents alike. The traditional view that attending college guarantees a prosperous future is increasingly under scrutiny. With skyrocketing college costs that far outpace the growth in earning potential, it's crucial to scrutinize this investment. To navigate this complex decision-making process, consider these factors to assess college through the lens of ROI.

Key Considerations in Evaluating College ROI

Cost vs. Earnings Potential

Historically, college degrees acted as a gatekeeper to higher-paying jobs. However, the cost of college has surged, and many graduates find themselves burdened with substantial student loan debt while earning a modest income. For example, an individual graduating with $120,000 in debt could struggle to find a job that pays $50,000 annually. This creates a precarious financial balance; if higher education doesn't lead to proportional salary increases, the financial strain can be overwhelming.

Skills over Degrees

Employers are increasingly prioritizing practical skills over formal education. A degree no longer guarantees employment or higher salaries. Focus on acquiring marketable skills, such as coding, project management, or service certifications. Many fields value what you can do, rather than where you went to school.

Alternative Educational Pathways

Explore affordable options like community colleges, online courses, skill-based training, and certification programs. These paths often provide the quality education and skills required to enter the job market, all at a fraction of the cost of traditional four-year institutions. For example, dual enrollment programs allow high school students to earn college credits while reducing future tuition costs.

Strategies for Maximizing Learning Opportunities

Effectively Searching for Scholarships

Seek scholarships early and often. Don’t overlook smaller local scholarships that may have less competition. Systems thinking can make a considerable difference; consider applying for scholarships as a part-time job. By focusing on standardized essays and themes, applicants can save time and increase their chances of success.

Utilizing CLEP Testing

Consider College-Level Examination Program (CLEP) testing to earn college credits through exams. This method enables students to test out of certain subjects, significantly reducing the time and money spent on obtaining a degree.

Exploring Non-Traditional Education Options

Programs such as coding bootcamps and professional certifications are powerful alternatives to a traditional college education. For instance, Salesforce certification programs can lead to six-figure jobs, often without the need for a four-year degree.

Real-Life Examples and Expert Insights

Listening to perspectives from those who have navigated these choices can shed light on the possibilities. One caller shared successful tactics that included utilizing military scholarships to cover education costs in exchange for service. Another highlighted opportunities abroad, where schooling is often far more affordable.

Actionable Steps Moving Forward

Calculate Your Costs and Potential Earnings: Before committing to a college program, map out potential earnings based on your chosen field and compare that to the estimated costs of education.
Explore Scholarships: Begin searching for both merit-based and needs-based scholarships, particularly starting in the earlier years of high school.
Consider Community Colleges: Investigate your local community college for options to transfer to a four-year institution later, effectively cutting your total cost in half.
Review Skills Training Programs: Identify skills training programs or bootcamps that align with your career goals.
Leverage CLEP Exams: Look into the feasibility of CLEP exams to expedite your path to a degree at a minimal cost.

Conclusion: Rethinking the Path to Financial Independence

The current landscape necessitates a shift in how we view education and its relationship to financial independence. While college can still be a valuable pursuit, it’s essential to approach it strategically, informed by the principles of ROI. By focusing on skills, exploring alternative education pathways, and applying systems thinking to scholarships, you can navigate your path toward financial independence without the burden of crippling debt.

For further resources and community support, engage with like-minded individuals who share your interests in personal finance and education optimization. The journey to financial independence is not a straight line but rather a series of calculated decisions aimed at acquiring the skills necessary to thrive in today’s economy.

Watch

https://youtu.be/Jsqk97YYlc0

Listen

[elementor-template id="143609"]

Read

What You'll Get Out Of Today's Show

Winter is over, spring is here, and Brad and Jonathan have hosted their fifth live event on Stereo!
With the new season and sense of hope, people are beginning to think more about traveling and travel rewards points. Start thinking about a trip you want to take and join us on Stereo next week for a live group travel rewards coaching call with Brad.
The focus of this episode is college. How can you do college for less or do you even need to go to college at all? After more than 400 episodes, optimization tactics related to college have popped up frequently. What has changed for 2021, what are the best practices, and what should you be thinking about?
In the FI community, we take a step back, see the world for what it truly is, and look at a problem a little bit differently. Society tells us that college is on the path to success, but knowing what we know now, there may be another way or a way to improve the ROI of going to college.
Back a generation or so ago, it wasn't uncommon for a college student to be the first in their family to attend college. College was seen as a way to make it into the middle class. It may have been true then, can still be true in some ways today, but the difference is the cost of college has risen dramatically while the earning potential did not rise at the same rate.
We have to be looking at college through the lens of ROI and understand what we are trying to get out of it. College signals that you can follow the rules, but an undergraduate degree doesn't necessarily mean you have skills or mastery over something and it's skills that matter today.
No one can afford to go to college for one hundred thousand dollars and come out earning $50,000. It will create financial chaos for a decade or more of your life.
Most people's incentives to go to college fall into one or more of these three areas: wanting to have the college experience, access to higher-income jobs, or a love of learning.
The college experience was not high on Jonathan's list of priorities, nor was attending a prestigious university, so he did two years of community college before transferring to Virginia Tech.
Brad's goal for college was to get a job upon graduation. Though he was accepted to Ivy League schools, he chose not to go to them as they were too expensive and opted for the University of Richmond instead.
If having the college experience or getting into the right school are top priorities for you, listen to ChooseFI episodes 114 and 154 to learn more about how to discount the cost of college using test scores and the FAFSA.
In episode 083, Cody Berman talked about how he approached applying for scholarships as if it was a part-time job and thought about it systematically.
Rob, from The Simple StartUp, called in to say that his parents used geo-arbitrage and moved back to Ireland so that Rob and his siblings could go to college for much less. For graduate school, Rob coached women's soccer in a graduate assistantship so that he was able to get his Master's for free and earn a stipend.
In episode 138, Anthony Gary discussed how he hacking his college room and board costs by becoming a Resident Assistant. Other past guests have talked about utilizing niche scholarships, like ones for golf caddies.
One listener left a voicemail asking how to incentivized kids to apply for scholarships. Jonathan would like to try and gamify it for the kids and Brad believes that there are a lot of merit scholarships available if which college your child attends isn't concerned with attending the most prestigious schools. He and Laura have made it clear with their daughters that they don't care about prestige when it comes to college.
Choosing where to go to college may mean saddling yourself with student loan debt for decades. We are having 17-year-olds make these decisions that can negatively affect their lives for decades without thought or counsel.
Jonathan suggests slowing down and providing kids with a better option.
In 202, the average cost of college was $110-120,000 and the average annual income for a graduate was $50,000. It's a lot of debt for a young adult to get out from under. A little bit of optimization can make it so much easier.
If looking to improve test scores, considering investing and paying the fee for test preparation services from companies like Edison Prep.
Chase called in to talk about the ROI of college in the military. He is in the National guard and gets reimbursed from both the military and his employer for going to school.
When you chose to put the time in to serve our country, it's possible to optimize the compensation package and never have to work again. Options to pay for college and serve include ROTC and the US military service academies.
Marjorie called in about geo-arbitraging college. She attended college in Puerto Rico for a fraction of the cost in the US mainland.
Many states have a guaranteed admissions program where you can attend community college for two years and then are guaranteed acceptance to a four-year-school, saving two years of higher-priced tuition, but make sure you know what credits will transfer over to the university.
How can you test out a college? In addition to getting college credit for AP courses, dual enrollment while in high school can be an option.
CLEP testing is a little-known secret as discussed in episode 238 with Millionaire Educator.
Another listener called in to mention Scholarship For Service, where you can get tuition and fees paid along with a $25,000 academic stipend with a requirement to later work for a federal agency. This program is similar to the Department of Defense Smart scholarship mentioned by Sunny Burns in episode 139.
If your desire to go to college is for the love of learning, do you really need to go to college? Jonathan says that they have proven there is a replicable path to earning six figures a year without going to college.
The son of ChooseFI's CEO, Edmund Tee, is earning his associate's degree while in high school thanks to dual enrollment then plans on taking a gap year to pursue Salesforce through Talent Stacker.

College Hacking: The Comprehensive Guide | Stereo Live Q&A
Episode 309