Tuesday, February 24, 2015

Worst return on Investment

Asian families seem to want  their children to be doctors, dentists, optometrists or possibly lawyers. Why is it that these are the professions are so coveted by people? Well we know that these are all professions that human beings need to make their lives better. Health is the one thing we can hold up as the  most important thing in our lives however a civilized and caring society needs other professional people to help and support one another. It is true that people in medical professions such as Anesthesiologists, surgeons, obstetricians, gynecologists internists, orthodontists, and physicians in general are seen as GODS in our present society. If you look at any statistics of the top paying professions the list mostly consists of jobs in health care, science related professions, economists, engineers, computer programers and professions linked to money.

 I just read an article on the internet on Salary. com called "8 College Degrees with the Worst Return on Investment". These degrees included sociology, fine arts, Education, psychology and communications. The careers from these degrees included social workers, chemical dependency councillors, copywriters, news reporters, marketing coordinators, human service workers, career councilors, dietitians, teachers, graphic designers, painters, museum research workers, daycare workers. I'm not critiquing the article but what it means to people who are in these professions. The return on investment for a teacher qualifying from a public university is 43% and from a private university is 13%. For a social worker the return on investment is 73% from a public university and from a private university it is only 21%. The median salary is $47, 000!

What do these figures mean for American society and what do they translates into for Americans and in particular for all 3 of my children who are all in this category? The article I mentioned ends with "we know money isn't everything. A lot of people do these jobs and have great and fulfilling careers. But as the cost of education increases it's important to know if you'll get your money's worth."

In a conversation with my husband about what our children have chosen to do for their degrees and careers we reflected on this issue. My youngest child's choice is to do a degree in Social work and attends a private college in the USA where the tuition and costs for a 4 year degree add up to a considerable amount. It was a difficult decision but we decided that we would allow her to attend this university even though it was expensive. It is a decision that requires hard work and discipline on the part of the student but also on our part as parents. My husband has to work hard and I have to be disciplined!

Being in this position made me wonder why is further education in the USA so expensive and how can other countries such as Holland and Germany and other countries afford to give their students free or low cost further education?  In my opinion American students are definitely not getting a better education than students in the other countries. I can safely say this as US employers regularly hire a select number of graduates from abroad to fill certain jobs in engineering and IT related jobs the USA.

 Why do students in the USA have a combined $1trillion in debt? Why has the cost of education in the USA risen so much faster than the overall cost of living? To make matters even more aggravating because of the recession until recently jobs were hard to come by, wages were in decline and overall purchasing power was declining. So even if you invested your money in a 4 year degree the return on the money you spend on the degree was guaranteed to be that great unless you were studying to be a doctor or in one of the professions linked to the medical fields.

I have been attempting to inform myself about this subject and learned that due to State governments cutting back on budgets for higher education State universities had to increase their tuition and charge students more to attend so "instead of each State taking the responsibility for the cost of higher education, the expense was transferred to the students" This happened across the whole country for  example over a period of 20 years from 1990 to 2012 some States like Ohio reduced their funding from 25% of it's budget to a mere 7%! "State university budget cuts continue and are accelerating according to an online article in "Alternet Education" with the heading "How did College Education become so ridiculously Expensive?" The article explains that the public universities increased tuition the elite private universities also raised their tuition so that they could "maintain their status and bring in more revenue setting off a an escalating spiral".
In the three decades that this has happened there have been widening disparities between working class and and middle class families on the one hand and wealthy families on the other. University education is seen as a way out of financial struggles but families struggle between their perceived need for an education and their lack the funds to pay for it. Most US students and graduates can only fund their education by taking out huge loans to get the education they need to keep up with their declining purchasing power.

After reading the articles related to this subject I have come up with the three reasons why the cost of American higher education has spiraled out of control over the last 30 years. I don't believe many Americans think about why the cost of education has spiraled out of control and many haven't a clue what the real reasons are. Many people don't realize it is the individual State governments who have actually perpetuated the situation by cutting State funding towards higher education because they know individuals will swallow the costs.
The second reason is the rising cost of administration and the huge salaries paid to the top officials of US universities who are paid as much as CEO 's international conglomerates and the last reason is money sent on inter collegiate sports programs and facilities such as fancy dorms which do not return much in the way of profits for the universities.
Humorous look at the subject from the internet.
So after learning the true reasons why higher education costs so much more in the USA than anywhere else and having 3 children who were educated here do I look at the money spent on their education as the worst return on my investments? Absolutely not! The education my children have received may not translate to them becoming rich or earning a lot of money but if I have 3 happy fulfilled people who are in professions they enjoy and feel they are being of service to people that will be their greatest accomplishment and my ultimate gratification.
If people really wanted to exercise their democracy they could voice their opinions and lobby the their government and the universities would take notice of them and change things. Also another way to reduce costs is to use a Community college to do some of the credits towards a degree which costs a lot less than doing all 4 years at University level. There are actually many other ways to reduce the costs of college which should be explored such as living in cheaper housing facilities, borrowing text books or renting them rather than buying them. Just a few suggestions that can be further explored.

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