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Considering the actual benefits of college

Mortarboard with price tag

Jeremy Hobson: President Obama heads Northern Virginia Community College in Alexandria today To highlight the value of a highly trained workforce. But he's got some convincing to do. A recent study shows a 57 percent of Americans don't think a college degree is good value.

For more on this, let's bring in LA Times Consumer Columnist David Lazarus. Good morning.

David Lazarus: Good morning.

Hobson: Well David, as students graduate from college, as they are doing now, if they are able to find a job -- which is hard to do right now -- how long do you think they're going to have to work to pay off their college debt?

Lazarus: It's longer and longer, it looks like. According to the figures that are out there, the average amount of debt that a college student is carrying is $23,000. That's an awful lot of money. And that's a big reason that the Pew Research Center has found in their latest study that a majority of Americans say that college is just unaffordable and not worth the price.

Hobson: Not worth the price. That's something we're hearing over and over again now -- is it worth the cost in this economy?

Lazarus: It's an interesting question, especially when you're facing that much debt and such tough prospects are finding the job. Not to mention the cost of tuition. The average cost for a four-year public university: about $20,000 a year in tuition, that doesn't even include room and board; $35,000 a year for a private university. So yeah, that's a lot of money. But I don't know, I look at that Pew number and I think people are sort of just responding more to these tough times than they are to the actual value of an education because let's face it, people with a college education do fare better in the marketplace -- when they can get a job. They tend to get more money, they tend to have better advancement prospects. So you would think that this education does provide the foundation most people need to advance in the world.

Hobson: L.A. Times consumer columnist David Lazarus, thanks so much.

Lazarus: Thank you.

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I listened to the Marketplace Morning Report piece last week that questioned the benefits of college—and suggested that a rise in gifted people skipping college altogether was in the offing—and I was struck by one thing: While commentator David Hobson bemoaned the high cost of college he reported that public universities now cost $20,000 without room and board. Who can afford that, he asked plaintively?

I have a question: Just who exactly is paying $20,000 a year to attend a public university that David Hobson cites? I quick perusal of the tuition rates for the fifty states and their public universities show that New Hampshire’s in-state tuition is the highest in the country at $13,672. And Mr. Hobson was quite specific in saying he was talking about tuition only.

His exaggeration of the cost of college isn’t unique: it’s common in nearly every article that bemoans the high cost of college, and these pieces all resemble Hobson’s: the only thing he left out was that he failed to extrapolate out 20 years from the highest tuition price in the country and tell the listener that in 2031 college will cost one million dollars and be unaffordable for all but the scions of the five richest kings of Europe. (Case in Point: The Wall Street Journal reported earlier this year that room and board at the top private colleges are now over $110,000. Perhaps if your child chooses to board at a nearby Ritz-Carlton, perhaps.)

How do people afford college? Simple: In my hometown of Peoria, Illinois there exists a superb junior college called Illinois Central College, which I attended. Annual tuition is a little under $4,000 a year and completion of an associate’s degree guarantees a student a spot in one of the state universities—as well as the skills necessary to excel there. Tuition for the state universities is about $10,000 per annum, and it’s no exaggeration to say that nearly everyone in the state lives within commuting range of one of the state schools.

In short, a person can get an excellent degree in the state of Illinois for less than $30,000, and anyone with a family income under $100,000 a year or a record of academic achievement is going to pay much less than that.

And while we can argue whether or not colleges these days devote enough attention and energy to making sure students acquire the skills we expect college graduates to have—the ability to think critically, express oneself via writing and speaking, and a modicum of other more tangible traits—the fact remains that most employers who are hiring young people for management-type jobs select from the ranks of college graduates. And there’s little chance of that ever changing. The income of a college graduate remains well above that of a non-college graduate and the difference is only growing, and recent studies indicate that the total lifetime income difference may exceed one million dollars—and that is NOT a number pulled out of the air by some pithy commentator trying to shock and early morning audience into paying attention.

Starting the workaday world with a debt of $23,000 may not be ideal for the college graduate, but represents a monthly payment of less than $300 for a decade at current federal student loan interest rates: that is a bargain price for the increased income it buys. Someone explain to me again why this is a problem that needs to be solved?

The "value" of an education is knowledge and not dependent on cost.Things learned and then understood allow people to live wisely (applying their understanding to their lives)within our world. Knowledge is the only safe form of wealth not sibject to the power brokers in the world who may or may not know very much at all. The cost of attending institutions of higher education is exhorbitant, but in life ultimately worth it for something once learned cannot be taken away.

That first paragraph needs an edit. A college degree "gives good value"?
U mean, "having" a degree, "is" a good value,don't U? how does a degree "give" anything? Unless, it gives 'one' (said) value?
Or, a degree ('has') or "is" (a) good value (to something)...
Like slowing down and using good syntax.
Mr. Lazerus is excellent, but he could drop his first "it's" in his first/same sentence.
U get comments like this from people trying to go back to sleep at 5am, U know?

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