Tubegraph

College vs No College Decision

7 min read

From: alexhormozi

The decision of whether to attend college is presented as a fundamental question in the “game of life” [00:00:02]. This article examines data and perspectives to help individuals make their own decision [00:00:07], considering both college graduates and non-college graduates.

Financial Considerations

The cost of college tuition has significantly outpaced starting salaries, doubling in the last few decades while median starting salaries have remained stagnant [00:42:00].

National Student Loan Debt

National student loan debt totals an staggering $1.76 trillion [01:04:00], surpassing the GDP of most countries worldwide [01:08:00]. This means young adults are accumulating more debt than entire nations produce [01:17:17].

Risks of Student Loans

Student loan debt has high interest rates and cannot be discharged through bankruptcy [03:17:00]. Individuals are often forced to take on this debt at 18, without fully comprehending the scope of a 400,000-$500,000 in post-tax money that will ultimately be repaid over a career [04:42:00]. This debt can significantly impact major life events such as starting a family, getting married, or buying a home [05:28:00].

Median Lifetime Earnings by Education Level

  • Less than High School: Less than $1 million [03:46:00]
  • High School Graduate: Approximately $1.3 million (30% better) [03:53:00]
  • Some College (no degree): $1.5 million [03:59:00]
  • Bachelor’s Degree: $2.2 million (more than double high school diploma) [04:02:00]
  • Master’s Degree: $2.6 million [04:08:00]
  • Doctoral Degree: $3.2 million [04:08:00]
  • Professional Degree: $3.6 million [04:12:00]

While higher education correlates with higher lifetime earnings, these earnings often accrue later in a career, especially for higher degrees [05:54:00]. The question then becomes whether the additional earnings compensate for the debt burden and deferred earning potential [06:10:00].

Probabilities of Earning More than a Bachelor’s Degree Holder

Statistically, the likelihood of earning more than someone with a bachelor’s degree increases with higher education:

This suggests a clear argument for more formal education in terms of earning potential [07:39:00]. However, it is crucial to consider if it’s “worth what it costs” [07:37:00], echoing Warren Buffett’s investment question of value versus price [07:51:00]. College degrees are not guarantees; for example, 27% of doctoral degree holders still don’t earn more than bachelor’s degree holders [08:40:00].

The Speaker’s Personal Experience

The speaker attended Vanderbilt University, graduating magna cum laude in three years while holding leadership positions [01:31:00]. He then worked in management consulting for two years and achieved a GMAT score above Harvard Business School’s median [01:44:00].

He later shifted to informal education, quitting his white-collar job to work at minimum wage at a gym, paying a mentor to learn the business [01:10:00]. He scaled a gym business (Gym Launch) to 5,000 U.S. locations and sold it for 200 million in annual revenue [02:30:00]. He credits his current success to what he learned outside of college [11:23:00].

Employer Perspective

Modern businesses prioritize experience and the likelihood of successful job performance over where an applicant went to school, their major, or GPA [02:46:00]. Many current job roles do not have specific college degrees because the economy has changed faster than academic curricula [02:48:00].

Industry and Career Path Impact

The impact of higher education on earnings varies by industry [09:12:00]:

  • Less Difference: Personal services, blue-collar jobs, health support, sales, office work [09:19:00].
  • Greater Difference: Science, technology, health professional (doctors), managerial, and other professional roles [09:28:00]. If a career requires a specific degree (e.g., accountant, lawyer, doctor), then college is necessary [09:43:00]. For roles like sales or marketing, or blue-collar jobs, it is less beneficial [09:53:00].

Nuance of Socioeconomic Background and Race

Research indicates that if factors like SAT scores and socioeconomic status are controlled for, white and Asian individuals may receive no additional value from college for earning potential [10:46:00]. However, for Latino and Black individuals, college can lead to a significant 30-40% increase in median earnings [11:00:00].

The most significant predictor of earning income is the zip code one is born in [11:47:00]. College can figuratively change one’s “zip code” by altering one’s environment and the people one compares oneself to, leading to changed behavior [11:54:00]. This makes college a strong argument for being the first in a family to attend, as it can change the trajectory of future generations [12:22:00].

Social Aspects of College

College offers a unique social experience, providing a once-in-a-lifetime opportunity to be surrounded by peers, make friends, and participate in social activities [14:50:00]. While alternative ways to socialize exist, it is harder to meet as many people of one’s age in a professional career setting [15:16:00]. This social aspect is a “pro” for college if that is what one is optimizing for [15:40:00].

Maximizing College Value

College can be a great value if obtained at a bargain:

  • Financial Aid, Grants, Merit Scholarships: If tuition is 50% or more covered, college can offer significant upside without the downside [15:56:00].
  • Top 20/Ivy League Schools: Attending institutions like Harvard, Princeton, Stanford, or Yale offers a strong “personal brand” impact [16:35:00]. The alumni from these schools often become part of the “ruling class,” earning significantly higher incomes [16:59:00]. These schools also often provide generous financial aid to students from less privileged backgrounds, making the value proposition even stronger [18:17:00].

To maximize the college experience, students should treat it like a professional job:

  • Network actively: Join social clubs, sororities, fraternities, and expose oneself to diverse opinions [26:21:00].
  • Prioritize learning: Don’t slack on studies; take more credits (18-21 instead of 12) [27:12:00].
  • Accelerate graduation: Finish in 2 or 3 years by hustling and attending summer school [27:25:00].

Recommendations

The decision depends on individual circumstances:

  • Go to College if:

    • You come from a lower-educated, lower socioeconomic family [19:58:00] and can receive significant financial aid (50% or more of tuition) [20:01:00]. This provides a new network, improves your “zip code,” and changes your family’s trajectory [19:07:00].
    • You get into a top-tier Ivy League or Top 20 school, regardless of financial background, due to the immense personal brand and network benefits [16:29:00].
    • Your desired career path requires a formal degree (e.g., doctor, lawyer, accountant) [20:52:00].

  • Consider Not Going to College if:

    • You come from a highly educated, higher socioeconomic family [19:17:17] and will not receive favorable financial aid [20:14:00]. In this case, you may not receive the same benefits as someone from a less privileged background and will incur debt and lose four years of career development [20:42:00].
    • You do not have a clear plan for your life; college alone will not provide one [21:01:00]. It’s more effective to learn about business departments and roles directly [21:37:00].
    • You are not attending a top-tier school that offers a significant advantage [24:39:00].

Maximizing the No College Path

If choosing not to attend college, it is crucial to still prioritize education, focusing on informal learning and gaining experience:

  1. Continuous Learning: Dedicate time and money to learning daily [22:28:00].
  2. Earn to Learn: Get paid to learn on the job, and reinvest earnings into further learning [22:48:00].
  3. Seek Mentorship: Pay skilled individuals by the hour, buy courses, or consume their content to learn specific skills [23:04:00]. Entrepreneurs and skilled individuals are often willing to help those who show initiative [23:26:00].
  4. Embrace Humility: Be willing to start at minimum wage and accept that others, though “less polished,” may know more in certain areas [24:11:00].
  5. Manage Expectations: The first four years of a career are for getting “smart,” not rich [23:58:00].
  6. Navigate Family Doubt: Family members, out of love, may encourage college based on their past experiences, but times have changed with free access to information online [24:55:00]. Address their fears by explaining the changing landscape [28:28:00].

Conclusion

Regardless of the chosen path, the primary objective should be learning to increase future earning potential [27:43:00]. Whether as a professional student or a professional who gets paid to learn, discipline and a commitment to acquiring relevant skills are paramount [27:50:00].

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