Is College Worth the Cash?

Tough Things First

The question is what has more value, the price of an education or work experience? In this Tough Things First podcast, Ray Zinn says one has an edge over the other. He’ll explain why smart choices will help you navigate these life decisions.

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Rob Artigo: I’m Rob Artigo, your guest host for this edition of the Tough Thanks First podcast. I’m a writer and former radio personality. Here with me once again is Ray Zinn, the longest serving CEO in Silicon Valley history. Hi Ray.

Ray Zinn: Hello Rob. Good to be with you again today.

Rob Artigo: Sure. I located a Pew research study that was recent, I think within the last week or two that it came out and it showed that only 22% of 5,200 college grads that were surveyed said that college is worth the cost if a student must take on debt. That’s only 22%. 47% said a four-year degree is worth it only if a student doesn’t have to take on loans and that leaves 29% of respondents who said college isn’t worth it no matter what. If you have debt or loans or whatever, it’s just not worth it.

Rob Artigo Cont:And obviously student debt has been in the news for the last year or more because of the Biden administration saying they were going to forgive some of the aspects of it. I think the forgiving interest on some of those loans, and I don’t know if people are too happy about that. You wrote me something recently on this and one of your musings that’ll make its way into print, I’m sure eventually.

Let’s start with that and I’ll bring in some of what you wrote a little bit later on, but let’s start with what do you think? I know that based on what you wrote, that obviously some jobs need a degree. I don’t know if matters for everybody, but it does for certain degrees and you think that that’s really the key question here is do you need it?

Ray Zinn: The cost of education is very expensive. You figure that depending upon where you go to school, it can cost anywhere from say, let’s say a two year, four year, six year, eight year. It’s going to cost around 20,000 a year just to go to school minimum. And then you have to live and you got to somehow to survive in the meantime. And so you got to figure out how long it’s going to take me to recoup that investment.

So if you’re a two year, you’re into it for 40 grand, you’re a four year, of course that’s 80,000 and could be going to a very expensive school that could run to quarter million dollars or even higher. So you got to do the math and decide is that degree really worth it? Meaning am I going to recoup my investment? So if you make something free where it doesn’t cost anything, then it doesn’t mean anything. And so as they say, no pain, no gain. If what you’re doing, you don’t have to pay for it, what good is it? There’s no value in something that doesn’t cost anything. You have to pay for something just to feel you’re contributing as you would.

Now, having all that said, going to school just for the sake of going to school is really a waste of time and money. Even though you’re young, you’re maybe you’re 18, 19 and you think, hey, you’re never going to die. Guess again. You will at some point. You’re going to have to pay for that expense as you would. And so the important thing is to, if you want to maximize on that education, maximize on the expense of that education, then you should know or at least figure out what kind of career you want to have.

Whether you want to be a hairdresser, whether you want to be a lawyer, or whether you be a doctor or construction worker, go to the school or get the education that you need for that particular occupation. Most occupations would say the majority of the occupations do not require a college education. They require experience, but they don’t require an education. Education unlocks the door. It’s experience that will help you succeed. So experience is actually more important than the education. So the education one would say unlocks the door, you’ll usually get paid more money. A person with a degree generally, generally I say gets paid more money, but then that money, that extra money you’re going to get because you have a degree should offset the cost of your education.

If your parents are paying for it or if the government’s paying for it or the military’s paying, whatever. If it’s all free, you don’t have to pay for it. Then you’re going to be less concerned about what kind of education you’re going to get. I know this sounds strange, but you should look forward to paying for your education yourself, not relying on your parents or relying on someone else to pay for your education. The best stories you hear are people who said they had to work as a dishwasher or work at a restaurant, or they had work in cleaning up the buildings or whatever to pay for their education.

I worked for my education, I worked and went to school. I didn’t get a freebie education. And so even if your parents are paying for it, you’re less likely to treat that as a valuable resource than if you have to pay for it yourself. Of course, if the government pays for it, that’s even worse. And so if there’s no pain, there’s going to be no gain, and so be scrupulous about what kind of a career you want, where you want to live. If you want to live in Washington DC then politics is probably the more prevalent education you’d want. Or if you’re going to work in a health industry, you’re going to work around some major hospitals and if you’re going to live in a rural area in the country, maybe you want to learn how to be a farmer or something or in construction.

So depending upon where you want to live, how you want to live, what you want to glean from the time you’re going to be spending learning, make sure it matches what your objectives are. We talked in one podcast about having clear goals and way points and knowing where you’re headed so you don’t just go in circles. The best thing to do is to really make a stab at really what kind of career you want, where do you want to live, how do you want to live? And then let that guide what kind of education that you want to have.

Rob Artigo: Yeah, I’m looking at these interest rates that if you had a new loan from a college since July of 2023 through next month, 2024, new loan that started. The fixed interest rate is, depending on undergraduate, graduate, and professional, and then parents and graduate or professional students. And some of these are subsidized loans and some of them aren’t. Apparently if it’s a subsidized loan, they don’t have to pay interest while they’re in school, but then it accumulates afterwards. But these percentages are five and a half percent, 7.05%, and 8.05%, which is a significant number if you end up talking a hundred thousand dollars or something like that. That’s a lot to have to deal with.

But at the same time, have you noticed there are certain things that you, classes you have to take if you go to the school, you have to, and most of them are social engineering type classes. They don’t say, “Hey, look, we’re going to give you a class that tells you exactly what to expect from a student loan.” So that they go into it eyes wide open. They mostly go into it completely ignorant and probably accumulate most of their debt in the first two years.

Ray Zinn: Yeah, not to beat a dead horse, but an education is only worth it if it helps you through life. If it helps you live where you want to live and how you want to live, then that’s how you should measure the value of your education. So going to school for the sake of going to school is a dumb way to do it. Just to say you have a college degree is not going to help you live a better life.

As I said earlier, getting an education opens doors, but experience is the one that’ll help you succeed. In other words, you can get the best education in the world, but if you don’t have the experience to go along with it, you’re not going to do very well. So again, education just opens the door. It’s the experience that you’re going to gain from that education that’s going to help you succeed.

Rob Artigo: Yeah. There’s also a loan fee when you take out your first loan. Let’s say it’s a $20,000 loan, I don’t know how much the amounts are, but let’s say it’s $20,000 and when you get the loan, you’re not going to get $20,000. It’s going to be minus 1% or thereabouts because they take a fee right off the top, which is, I mean, people just don’t understand what they’re doing to themselves. And like I said, it has to be worth it.

Well, Ray, our listeners can join the conversation at toughthingsfirst.com and if they have questions or comments, they can also reach out to you there at toughthingsfirst.com, and you can follow Ray on X on Facebook and LinkedIn and of course, pick up Ray’s books. Tough Things First, and the Zen of Zinn one, two, and three. Thanks, Ray.

Ray Zinn: Thanks, Rob.