Katie Thinks School's a Scam
- Landon Tan, CFP ®
- Nov 1, 2021
- 3 min read
My partner likes to say that education is a scam. Or perhaps a tool of the state to make children compliant. Katie, as brilliant as she is charming, is a bit of a rebel. I on the other hand am more of a student of orthodoxy, and while I failed out of pre-med, it may have had something to do with how much time it takes to be obsessed with every little detail. Still, I got a lot out of college and if I could go back I would definitely do less dating and more reading. Nietzsche and I would be booed up.
There is an optimistic anarchism à la David Graeber that says that without structure, true creativity would be unleashed and people would reach their true potential. I’ve been more passionate about learning since I left school and got to read whatever I wanted, but I don’t think I would have gotten as wide an array of knowledge without the system creating structure and accountability. I think there’s a certain level of flakiness or inertia that is more of a human default. As parents, Katie and I hold these polarities as we look ahead to the schooling that our child will eventuality receive. Me with excitement thinking about explaining fractions and Katie with dread that his spirit will be crushed. As I was brushing my teeth this morning, I got to thinking how funny it is that Katie actually has two master’s degrees and is about to become a doctor of nursing practice. Is education a scam? I have seen educational debt loads big enough to make a Nigerian prince blush. You might take out half a million dollars to finance a graduate degree and then rely on income-based repayment and government forgiveness while you anxiously watch your balance tick up every month to an amount you could never pay on your own. Some public servants even served their communities for ten years before realizing that they were in the wrong type of loan to receive Public Service Loan Forgiveness—an issue that has mercifully been retroactively fixed by recent legislation. Fingers crossed that the program still exists for those only starting to certify their new employers today. Others with more debt that they can manage work in the private sector. Therefore they have to settle for the 20 or 25 year forgiveness deals, which unlike PSLF we expect to be taxable to the extent of your solvency (i.e. owing tax on $1M of “income”, but not if you’re broke). Worst of all, some take out massive private loans, which don’t offer federal relief and might not even go away if you die. When seen from this angle, it can look very bleak. Of course, the calculation is different for each individual situation. Are you able to pay for the degree out of pocket? Is this a Ph.D. program that pays you to T.A. and charges no tuition? A couple years of cheap community college paired with an in-state bachelors? Or a loan-financed private education in a field that pays you handsomely? Or, like Katie before she got one of Landon’s famous financial plans— a plan of YOLO / fuck it, none of it is real anyways. You can make a lot of money without higher degrees as an entrepreneur or celebrity! But as my highly educated peers get older, I’m starting to see that those who complained of their crushing debt a few years back are also those who are generally making six figures now in their 30s and 40s. The debt is old news. So is Katie’s ire warranted, financially speaking? A study cited by the Social Security Administration reported that after accounting for socio-demographic covariates, bachelor’s degree holders or higher made between $587,000 and $840,000 more than high-school graduates over a 50-year career. That’s more than most people pay for their degrees. In one snapshot below of 2020 you see how differently the fates of graduates compare to their peers with less educational attainment.
What’s more difficult to quantify is if the training and enrichment gained warrants the credential inflation we’ve seen in recent years. Let alone the shape of your heart and soul after it’s been squeezed in and out of so many school assignments. But as my highly educated spouse exemplifies (but does not condone), you can get a lot of schooling and still turn out quite well.
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