Investing In College—Is It Worth It/$50K A Year?
This article was originally written for Forbes.com.
Ann Arbor is beautiful in October. The trees are in splendid color, accentuating the campuses of the University of Michigan. Having toured the Central and North campuses, I felt comforted that my eldest (son) would have an intellectually stimulating environment and undoubtedly sound academic experience. We felt likewise after visiting Stanford and Berkeley – the other two schools in his top three out-of-state choices. Rounding out the list are three in-state (Ohio) schools that we also have visited.
As I have begun the life stage when my three children start matriculating to college, I am experiencing a strange confluence of my professional and personal lives.
Only a week prior to visiting U of M, I gave the opening keynote address at the 10th annual conference for the National Association for Community College Entrepreneurship. I cautioned the 500 in attendance that higher education is in a transitive state – a bubble to be more accurate. With costs escalating at an unsustainable pace, the competition among schools, and those having the debt capacity to pay for it, would likewise be an unsustainable pursuit.
The once easy choice for many of going from high school to some form of accredited higher education is becoming less of a forgone conclusion simply because of the economics and by the entrance of for-profit schools of varying types; including alternative options to college altogether like the UnCollege movement and the Thiel Fellowship program. The entrance of these new players (entrepreneurs) will impact some traditional sources of higher education and certainly challenge our obedient consumer consensus that a ‘traditional’ education will best serve my progeny.
These academic upstarts are succeeding because they are aiming, academically speaking, where the market is going and not where it is today. I learned this lesson as an entrepreneur. Have a complicated product with multiple influencers and decision makers—like choosing and paying for college—then a time-tested way to sell the product is by understanding the motivation of your client’s clients.
In the world of academia, this means understanding the needs, wants and complaints of those companies desperately seeking qualified employees. The actual job creators in the economy are having their growth hampered by the lack of skilled employees capable of critical thinking, problem solving and behaving like an entrepreneur; namely, high tolerance for ambiguity, self-directed learner, capable of leveraging networks and maximizing available resources.
For the past two years, the Kauffman Foundation has surveyed Inc. 500|5000 companies at their annual conference. We have asked these fastest growing companies in our country, what is holding back your growth? We offered great election year fodder for answers like foreign competition and taxes that are too high.
Surprisingly for some, not for us, the most popular answer was access to talented staff – with nearly 50 percent of responses citing this challenge. In discussion after discussion that I personally had with these incredible entrepreneurs, I heard the common theme that schools were simply not producing graduates with the skills necessary to add value in today’s economy.
Ask yourself this, what parent is happy with shelling out as much as $50K a year to a ‘great’ school only to have their child unemployed or dramatically under employed upon graduation? Better yet, how do you think they feel about their young adult having to move back home because they can’t afford simple rent or groceries?
In some cases, schools are hedging against their own demise by launching competing freemium offerings that give (via the Internet) access to their knowledge (for free) while charging for the credential proving that you at least consumed it. I applaud this effort, and time will tell if the market reacts by accepting these completion credentials. But I think the broader question, an answer to which could provide great entrepreneurial opportunities for incumbents and new entrants alike, is how might education pivot to measure subject matter comprehension and skill mastery over rote memory regurgitation?
As this education bubble is popping, will schools be able to regain the confidence of the economy that they can produce capable employees—or better yet, send more innovative and creative thinkers out into the world ready to pursue an alternative career path of entrepreneurship?
I know I shouldn’t have been surprised, but I was when I asked my son why he chose the schools he did. As casually as answering where he might have left the morning paper after reading it, he said, “Well . . . I am probably not going to graduate as my startup will likely need me to be working on it full time somewhere between my sophomore and junior year. So I need to pick the schools that will give me the best networks, choice of co-founders, and culture of entrepreneurship.”
For that reason, I apologize to the campus tour guides who endured questioning from the weird dad asking about all the entrepreneurship stuff. I can’t help myself as a father to look out for my child, which would even include being a cofounder for his yet-to-be imagined startup. But I might as well consider the cofounder option, as the costs of his education will most certainly make me an investor in his future venture.