Why Millennials Have College All Wrong

Why Millennials Have College All Wrong

Since high school (& college) graduations are happening across the country over the next few weeks, this article would be my message to the graduating class of 2017 (if I was invited to be a speaker). I know several readers of Money Buffalo are taking a different, more cost-effective approach to college for their own children.  

For generations, the typical path for most high school graduates has been to enlist in the military, enter a “hands-on” such as manufacturing and construction, or earning a 4-year degree. As colleges continue to ratchet up tuition prices each year resulting in historic amounts of student loan debt, an increasing number of families are wondering if going to college is truly the best option. Even though a bachelor’s degree might seem like a basic requirement to qualify for any job that pays more than the minimum wage, the traditional college model is broken for most Millennials and they should reconsider their degree options.

Even though a bachelor’s degree might seem like a basic requirement to qualify for any job that pays more than the minimum wage, the traditional college model is broken for most Millennials and they should reconsider their degree options.

The Student Loan Epidemic

Each spring, as the latest crop of college graduates enter the workforce, news outlets publish the latest student loan statistics. Without fail, the average student loan balance grows every year with the most recent graduating class, the Class of 2016, owing to the banks $37,000 before earning their first paychecks. Guess what? The graduating class of 2017 is projected to have an even higher loan balance.

Through a combination of tuition increases as colleges provide more amenities than before, reduced state funding, and an increase in graduate school enrollment, Millennials are arguably the most educated generation in American history and yet they earn 20% less compared to the average income of Baby Boomers in their 20s and 30s. There are more economic forces, in addition to being “overeducated,” that have contributed to the deteriorating value of salaries, but, Millennials need to start thinking outside the box when it comes to earning a college degree.

Related Article: Whatever Happened to Penny Candy? will help explain why $100 is worth less today than 30 years ago

Today’s College Graduates are the Least Entrepreneurial Minded

America has long prided itself on being the Land of Opportunity where anybody can achieve the “American Dream” through a little hard work. High student loan balances, various insurance and self-employment licensing mandates, and the “Great Recession” have all contributed to making Millennials the least entrepreneurial-minded generation currently living. Entrepreneurship isn’t for everybody, but, high student loan payments & living expenses means more college graduates are flocking to the relative security of a steady paycheck from an established employer because it’s simply too expensive and risky to start a business while they are still young and single.

The Majority of College Graduates are Overeducated for the Future Profession

How many college graduates wind up working in the career field they studied for in during college? Try two-thirds, although, the first job of approximately half of college graduates is not related to their major. With approximately 2 million bachelor’s degrees awarded annually, that’s 660,000 graduates each year that essentially went to college to have the diploma hanging on their wall. That statistic might be even higher if it wasn’t for those that attend graduate school to earn a professional degree to make them more competitive in the job market.

A college diploma can still be a “Golden Ticket” but it’s more expensive to get (just like the investment price of gold per ounce in recent years).

How Millennials Can Do College Differently

Cost is the only distinguishable difference between the college degree a Millennials earns and their parents’ degree. Political science majors are still reading the works of Plato, Aristotle, and Machiavelli as college students did 40 years ago. Sure, their current events classes might focus more on the Middle East & BRIC economies instead of the Soviet Union economics. While there will always be a need for traditional 4-year colleges, most Millennials can take matters into their own hands when it comes to controlling the cost of college.

Standard thinking is that the only way to save money while earning a degree is to attend a local community college for the first two years, where tuition costs are lower and you can still live at home, before transferring to a 4-year college or by attending an in-state public college instead of a private institution or an out-of-state public college. Thankfully, these aren’t the only ways to earn an affordable and useful college degree.

Technical Schools & Apprenticeships are Great Alternatives

There is a stigma attached to Millennials that do not pursue a traditional 4-year degree. Well, some career paths are better pursued by attending “tech schools” or apprenticeships with on-the-job training that are a fraction of the cost of public college and have a similar earning potential.

Earn a Degree through Credit by Examination

The first two years of college are a near repeat of high school for most students. English Composition, World History, and Statistics are some of the few classes that are required for both high school and college. While the college courses are more in-depth than their high school equivalents there is a lot of redundancy.

Instead, more Millennials should take engage in a process called “credit by examination” by taking CLEP and DSST exams that allow you to “test out” of classes based on what you know already. These tests are popular among the military members and working adults because, for about $100, you take a multiple choice test on a particular subject (i.e. American History or English Literature) and are awarded the equivalent of one or two semesters of college credit if you pass without having to attend a single class!

Several states also offer PSEO options such as dual enrollment courses that earn high school & college credit. Or, you can take advanced placement exams. Speaking from personal experience, I recommend dual enrollment (or similar programs) as most college students are more likely to earn college credit.

This Option is Possible for Anyone!

Credit by examination is an option for anybody whether it’s a high school or homeschool student wanting to take a test at the end of the school year when the material is still fresh or an adult with a full-time job and a young family. It’s even possible to earn an entire, accredited bachelor’s degree solely from these exams for less than $10,000! Traditional colleges might only accept the equivalent of a single semester of exam-earned credit, but, this can still save thousands of dollars!

Credit by Examination is Ideal for Aspiring Entrepreneurs

You won’t hear most colleges talk about this option because it’s unconventional. It does take some self-discipline as you are responsible for studying and taking the necessary exams although you can make a degree plan on the CLEP and DSST websites. But, this a great option for those that are looking to minimize how much time they spend in the classroom and use their hard-earned dollars to launch a side business or buy a house instead of making a monthly student loan payment.

Credit by Examination is Also Great for Traditional Employment

As virtually every traditional corporation requires a bachelor’s degree that previously only required a high school diploma, degrees earned through credit by examination have two potential benefits. In addition to the ability to graduate debt-free, this non-traditional path helps make you unique. Employers are desperate for problem solvers. Earning a degree in an atypical manner is accomplished by thinking “outside the box.”

Is College Obsolete?

A typical college degree doesn’t have the same financial and professional effect it once did because enrollment has swelled at undergraduate and graduate schools. Some professions require advanced schooling to become a doctor, nurse, therapist, or lawyer. Credit by examination is still a possibility for their general electives to reduce tuition costs, but, for everybody else, there are several ways to earning a college degree for the same cost their parents or grandparents might have paid.

16 Comments on "Why Millennials Have College All Wrong"

  1. I completed two years at a local community college before transferring to a 4-year school to complete my degree. This saved a TON of money. Just about everything in the first two years is basic pre-major information. And I’ve never heard of an employer caring – if they care at all (often they don’t) it’s only about where the degree was finished. That’s what shows on the diploma.

    • Exactly. My state (TN) started the Tennessee Promise that pays for the first two years of college if you go to a community college and meet certain academic criteria. There are so many ways that are cheaper than going straight to a 4-year university that everybody thinks is the “only” way.

  2. Excellent post. We are searching out all avenues when it comes to funding college for our two kids who are set on going at this point, and we’ll definitely be considering CLEP testing. It’s a phenomenal avenue that few too people know about!

    • Thank you Laurie & I know you guys are doing what you can to get your children to & through college as efficiently as possible. We recommend Clep, even if it’s just for one or two classes, in addition to any other ways you might be able to get college credit in high school.

  3. There is so much opportunity in the world right now with the increased value of the internet. I’m looking to leverage my time and abilities to build a business that will leverage the connections I’ve made online. If you could bring me back 10 years to 15 years old, I don’t think college would be in my plans.

    Thanks for sharing your thoughts Josh

    PS. Nice new layout!

    • Networking is huge in any career field. It’s something I didn’t do enough of in my college years or first professional years. Looking back, I don’t know if I would have done college either. It’s a catch-22 for me, I needed a college degree to get my job (without going through the ranks) but I didn’t need a college education. Plus, most of my post-college income streams have nothing to do with my college major or minor.

      That’s why I think it’s great when today’s youth are happy to do other post-secondary options instead of getting a run-of-the-mill liberal arts degree (like me & so many others did) because the return on investment just isn’t there.

      P.S. Thank you on the layout, I went back to my original theme. I had some hosting issues a month or two back & didn’t realize it had been reset to the start WordPress theme.

  4. My niece graduates from high school this week and has made the decision to start off at a community college. This was a purely financial decision that she made on her own (she had the option of going to a 4 year university). I love that she sees the financial advantage here.

    • That’s great to hear an 18-year-old make that decision. I was going to do the community route as well, but, for my original career plans, it was better to do the 4 years at one school. During the summer, I did take some classes at the community college one summer to lighten my academic load & save some money on tuition.

  5. PSEO is huge in our state and we have several universities within driving distance. There are also regional branches of the state universities, which are less expensive to attend. And community and technical colleges in the area as well. I am very grateful that our children will have these options available to them and we will make sure they explore them before graduating from high school.

    • Options are great & it’s awesome to hear you are planning on pursuing these options. Obviously, we are going to be pursuing similar options with our own children.

  6. I went to community college to pick up credits in the summer to finish up school faster. I was ready to make money and knocked out college in three years. I definitely think too many people are pushed into college and then told to figure it out later instead of taking their time to figure out things on their own time. Which leads to mistakes. I have a friend that went to college but quickly found out that he loved being a carpenter. If he had waited two years he wouldn’t be paying on the out of state loans that he is today.

    • Congrats on being able to graduate early. I could have finished a semester early but decided to do a semester abroad instead (the best $8,000 I ever borrowed). I had a few classmates that didn’t finish college either because they realized it wasn’t for them. Sometimes I don’t think it’s a bad idea if some teens take a gap year if they use the time productively to explore potential career paths or save up money for college (not playing video games & partying).

  7. Good message, Josh, though I think this message isn’t for millennials but for generation Z. I know I’m splitting hairs here but I think of those graduating high school and younger as Gen Z, but yes let’s help Gen Z make different choices when it comes to college! Unfortunately I do think this is a very emotional decision, not a financial one, for most graduates. Parents usually don’t do their children any favors as they don’t want to have a hard conversation of “maybe you should do _____ instead of going to ______.”

    • You are the second person to mention Gen Z. I had a conversation with somebody a couple weeks ago. Technically I could have a 12-year-old child by now if my wife & I married and had children as soon as I graduated high school.

      Choosing a college is very tough, financially and emotionally, as you can apply to just about anywhere and get accepted with similar eligibility criteria. I had acceptance letters from schools in 3 different states from the East Coast to the Mountain West. My parents discussed some of the options but I had final say. I do think the student needs to make the final decision, but, parents should have those hard conversations as they have been paying rent, bills, after-school activites for 18+ years.

  8. CAPT Jim Philpitt, USN (Ret) | November 14, 2020 at 11:27 am | Reply


    The comments here are now over 3 1/2 years old, but they are as timely today as they were then. You and the other commenters have provided solid examples that, in my view, should be read by all prospective students, as well as parents and high school educators, administrators and guidance counselors alike. My wife and I never had kids, but why more high schools don’t emphasize the CLEP option to their college-bound graduating seniors…especially given the financial and career challenges we’ve seen with Gen Y and could very well see with Gen Z…continues to puzzle me.

    I graduated from high school in the early 1970s and exempted my entire freshman year of college via CLEP, so this is not a new concept. To be sure, I had other unique advantages that enabled me to graduate debt free. I was the son of a deceased Navy Chief Petty Officer, a non-college educated career enlisted man, who died in uniform. So, I had received monthly survivor and “war orphan” benefits from the time I was 7 1/2 until I graduated from college. ROTC scholarship $$$ didn’t hurt either…and 2 weeks after I graduated, I was in Navy flight training and on my way to a 30-year Navy career that segued into a comfortable and rewarding post-Navy career.

    Certainly, we as a society can do better when it comes to vectoring our young folks away from sub-optimal choices that may result in crushing debt! First, we need to eliminate stigmas that have increased over the past 40 years with regard to high school graduates not going to college. When I graduated from high school, only +/- 25% of the students at my middle class public high school were on a so-called “College Prep” academic track and had the motivation and academic acumen to succeeed in a college/university enviroment.

    Despite predictions to the contrary, the number of career tracks requiring a BA or BS degree in the 21st century have not increased as originally anticipated…certainly not to the 65% or 70% level of current college enrollments among graduating high school seniors. In 30 years of Navy flying, the vast majority of enlisted personnel working on my airplane, packing my parachute, providing me with pre-flight weather forecasts and intelligence briefings, handling my pay, medical and service records or handling numerous aspects of my annual flight physical, did NOT have a BA or BS degree. But they were all highly competent and professional and…in many cases…I trusted them, literally, with my life. They made be proud every day. This is just a military example, but a similar case can be made for our civilian firefighter/EMTs, police officers, auto repair technicians, electricians, plumbers, the skilled building/construction trades, IT professionals, and a whole host of other endeavors necessary to 21st century life that do NOT require a BA or BS degree, let alone an MBA or a JD.

    But let’s get back to our prospective college and university students.

    While not every college-bound student will want (or even qualify) to be a military officer, for those who do the funding via ROTC or the Marine Corps Platoon Leaders Class (PLC) program can be a huge boost, with scholarships paying 100% of tuition & books plus a monthly tax free stipend and guaranteed employment on graduation. And, although it’s a much more rigorous experience, my colleagues who graduated from the various service academies (USNA/Annapolis, USMA/West Point, USAFA/Colorado Springs, USCGA/New London, USMMA/Kings Point) were essentially paid to go to school. Later on, for those of us who were fliers who didn’t bolt for the airlines (earning far more $$$ than we did in a Navy, Marine Corps or Air Force jet) and remained in the service, the military also paid for the postgraduate degrees we earned later in our careers. Two of my friends also became astronauts and went into orbit in the Space Shuttle and the International Space Station, while others had medical school, dental school or law school fully paid for by the military that led to lucrative and rewarding careers after they hung up their uniforms.

    Another option has been enlisting. Several friends of mine, male and female, who couldn’t afford college straight out of high school enlisted in the active duty military, gaining up to and including an AA or AS degree through programs such as the Community College of the Air Force (CCAF) or the Program Afloat for College Education (PACE), and later attending colleges or universities to earn a BA or BS on the Veterans Administration’s dime. Another enlisted in the Florida Air National Guard and later became a commissioned Air Force officer after earning his BS degree. If you’re a Guardsman in Florida, the Florida National Guard will pay 100% of tuition/books/fees at any public college or university in Florida. Other states have similar programs for their Guardsmen.

    Again, these military options are not for everybody. But CLEP can appeal to and reach a far wider group of college-bound students and, for a comparatively minimal cost, significantly reduce the cost of a higher education by up to 20% to 25%. We need to continue to beat this drum, not just with parents, but especially with those influencers in our secondary education system who shoulder much of the weight in guiding our young people’s decisions in this area.

    • Jim,
      Thank you for the key insights and you have an awesome story.
      I’m a huge fan of ROTC/CLEP options–not for everyone but it’s a great experience and opportunity. Plus, college is ridiculously expensive and I wish we could go back to where a high school diploma is sufficient to earn a living to feed a family.
      I wanted to go to the service academies but I didn’t have the brains for it–the academy grads I know are definitely smart and go-getters.

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