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We’ve lived through the tech and real estate bubbles. What’s next?

How about college?

University cost increases long ago outstripped the wage benefit of going. Or so, I’ve read.

Thus, demand will eventually reflect this fact and fall, and the cost of attending college will have to come down. Right?

Undergraduate tuition has no doubt skyrocketed. Take NYU — it costs about $20,000 per semester to go — that comes out to $160,000 for four years. And that’s just tuition. It doesn’t count the stuff you need to survive. You know, like food and shelter.

Let’s take three 18-year-olds with wealthy parents. Each has $160,000 with which to do whatever he wants. (This is more common than you might think: I seem to have many friends with zero student loans.)

Annie goes to college. Her $160,000 goes poof, for now. Paul invests his money and goes to work in a trade. Jim starts his own business. (For simplicity’s sake, I don’t give Jim equity in his own business. Ha.)

Here’s where they are after 20 years:

But wait. Jim’s business could be wildly successful, allowing him to pay himself (and his employees) more. Annie could major in art history, thus depressing her average annual salary. Paul’s investments could do really well.

Now what?

Or, Annie could major in business or technology, thus increasing her earnings power in the information age. Paul could work his way up to management or work in a region with trade-union-boosted wages. Jim’s business could flop after year three. Now how did that initial decision play out over 20 years?

Conclusions:

  • One. You can’t model out life in an Excel spreadsheet.
  • Two. Life won’t be so bad for anyone who starts out at age 18 with $160,000.
  • Three. College doesn’t seem to make sense unless you get a degree that is useful. With a useful degree, college still seems worthwhile, even at today’s escalated tuition costs.

I was a first-generation college student — and that was the best thing that could’ve happened to me in the late 1990s. Especially because I didn’t start out with $160,000 to play around with and because I majored in computer information systems — which gave me a marketable skill.

I grew up in a scrappy blue-collar suburb of New York.  My formal education threw me in with a mix of people I wouldn’t otherwise have met and catapulted my career way beyond what I could’ve imagined at 18. I could only afford college because I got a ginormous merit-based scholarship from American University plus need-based aid. (I took on debt for graduate school at Northwestern U.)

Also: A few key professors stepped in with wise advise throughout my life. They’re worth their weight in gold to me. How do you put a dollar value on a good mentor?

No question, the cost of an elite school draws a distinctive line between have and have-not. The system works only for those fortunate enough to have been born on the “have” side, or who’ve hard-work-and-lucked themselves over to it.

More and more smart people are questioning the university system. Education was the great equalizer for my generation and many before it.

But will it be for the next generation?

Explore more:

8 alternatives to college

Generation Z will revolutionize education

Is a college degree worthless?

Why does college cost so much?

There is no college cost crisis

Now it’s your turn. What do YOU think?