Is going to college still a good investment ???

By Roland Jones, msnbc.com editor

Few would argue with investment advice from Warren Buffett, one of the world’s wealthiest people, who has often wisely said the most important investment anyone can make is in their own education.
But as parents send their children off to college this fall, a spate of research suggests it might not always be a good investment.

Take, for example, “Higher Education?: How Colleges Are Wasting Our Money and Failing Our Kids -- and What We Can Do About It,” published last month. Authors Andrew Hacker, a prominent sociologist, and New York Times writer Claudia Dreifus make the case that many universities are charging too much and offering too little to their students.

 Adding to the depressing outlook for higher education is a column in last week’s Economist suggesting that American universities could go the same way as Detroit.
Citing the Hacker and Dreifus book, and also recent reports from the American Enterprise Institute and the Goldwater Institute, the article portrays universities as blighted by excessive administration, low productivity and rising prices -- just the sort of problems that brought down the once-dominant U.S. auto industry.

Despite the gloomy perspectives, it shouldn’t be forgotten that America’s universities are still the envy of the world, dominating global rankings. The preservation of that system is vital to maintaining America’s competitive advantage, which is built on innovation and fueled by the strong university system.

Enrollments are spiking as the jobless rate remains over 9 percent and many unemployed workers seek safe harbor in school. Hacker and Dreifus look at where students can get value for their money, and it’s often not in the most expensive, top-tier schools, where a four-year degree can cost a quarter of a million dollars.

For example, Western Oregon University, a former teachers’ college, does its job without any frills or pretense and with utter seriousness and dedication and costs are kept at a minimum, the authors note. The university even offers a “tuition promise” to entering freshmen: Their fees will remain constant throughout their four years.

The rising cost of tuition is a huge and growing concern. Americans owe some $829.8 billion in student loans (both federal and private), more than they owe on their credit cards ($826.5 billion), according to an article in The Wall Street Journal published last month. And they’re finding those loans harder to pay back. Defaults on federal student loans climbed in the fiscal year that ended in September 2008, federal data released this week show, to 4 percent from 3.7 percent for private, nonprofit schools, to 6 from 5.9 percent for public schools, and to 11.6 from 11 percent for for-profit schools.

The Wall Street Journal also has reported that U.S. employers are favoring graduates of big state universities over graduates of Ivy League and other elite liberal-arts schools when hiring to fill entry-level jobs. Of the top 25 schools as rated by these employers, 19 were public and only one was an Ivy League school (Cornell University). So is higher education still a good investment? There’s a long list of successful Americans who never completed a college degree, including Microsoft co-founder Bill Gates, Apple co-founder Steve Jobs, Facebook co-founder Mark Zuckerberg and Oracle founder Larry Ellison.

What are your thoughts on this issue? Share them below.

Source: www.msnbc.com
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