Is a $90,000 Per Year Undergraduate Degree Really Worth It?

With the astronomically high costs of higher education these days, prospective students need to very carefully consider whether taking on massive debt for a prestigious degree is truly worth it in the long run. While big-name universities certainly carry prestige and can open some doors, the extreme cost can lead to a debt burden that financially cripples graduates for decades after earning their diplomas.

The figures are almost unbelievable. To be honest, these numbers make me sick to my core!!

Many elite private universities in the United States now charge well over $80,000 per year once you add up tuition, fees, room and board. A few have even crossed the $90,000 per year threshold, including University of Chicago ($92,000), Columbia University ($93,000), and Northwestern University ($94,000). For a standard four-year bachelor's degree at that cost, the total price tag amounts to over $360,000 before even considering interest on loans. Factor in interest accruing over 10-20 years of loan repayment, and the all-in cost can easily exceed a half million dollars !!!!!!!!

Besides the staggering outright costs, students paying $90,000 per year for a degree are also foregoing an incredible opportunity to build wealth during those four years. Let's say a student invested that $90,000 annual cost into an S&P 500 index fund each year rather than paying it towards tuition. Assuming annual growth of 7% (the approximate average for the stock market after inflation), after year one that $90,000 investment would grow to $96,300. After reinvesting $90,000 plus those gains in year two, it would grow to $199,701. After years three and four, while still investing $90,000 annually, the account balance could realistically reach over $373,000. Instead of finishing undergrad with over $360,000 in debt, that student would be entering the workforce with an investment portfolio worth nearly $400,000 which could be used for future goals like buying a home, starting a business, or living their lives FREE of stress!!

Looking back... I ended up going to the University of Miami, and if my memory serves me well, then I paid $42,000 per year plus an additional $1000/month in rent and another $1500 in living expenses/month, totaling $72,000 per year. This was from 2009-2013 and we're already 10 years past that. While I was fortunate to have only taken ONE year of student loans, I find that they still occupy my mind every so often.

Is Prestige Worth Bankrupting Yourself?

With such an enormous financial investment required, prospective students absolutely must ask themselves whether having a prestigious name on their degree is really going to pay off enough down the road to justify taking on such crushing debt. Ego will play into it. I know it does for me! Having the social brag rights to say that this is my alma mater felt important to me at the time... less so now.

For specialized careers like investment banking at a bulge bracket firm, big law at an elite law practice, or medicine at a top hospital, the brand-name factor can truly be pivotal in getting a foot in the door. But for many other fields and career paths, most employers care far more about skills, experience, drive and accomplishments than the college name on your diploma.

For the majority of students, a high-quality public university education can provide an extremely cost-effective way to get an excellent, rigorous education at a mere fraction of the price of elite private schools. In-state tuition plus room and board at a flagship state university usually runs between $20,000-$30,000 per year, potentially saving $200,000 or more over four years compared to a $90K per year private school. Many large state schools offer top-notch academics, incredible resources, career preparation, networking opportunities and more. Well-known public institutions like University of Michigan, University of Virginia, UC Berkeley and others can be outstanding values.

For cost-conscious students, one insider strategy to pursue is attending a community college for 1-2 years, then transferring to a four-year school to complete their bachelor's degree. With annual costs at community colleges often just a few thousand dollars per year, students can complete a large portion of their general education requirements at a tiny fraction of university prices. Many state university systems have articulation agreements facilitating a smooth transfer process for community college students meeting GPA and credit thresholds. While the community college name may lack prestige, the four-year university name on your final diploma is what truly matters to most employers. Or... get more creative and grab a degree in Europe for 1-2 years before transferring back to the United States.

Now that I'm 10+ years in the workforce I see how utterly useless a college degree CAN be haha. The majority of my friends don't have careers in their selected college majors. Nor do top corporations truly care where you came from. It's a matter of connections (aka referrals) and relevant skill sets, meaning, all you need is maybe 1-2 years of basic entry-level experience before someone else can refer you into a more "prestigious" career, if that's what you're looking for!

There's no doubt having a degree from an elite, prestigious private university looks great on a resume and may help get your foot in the door in some fields. But students need to realistically and pragmatically weigh their expected debt load versus the likely career payoff and return-on-investment that a bachelor's degree will realistically provide.

For the vast majority of students pursuing non-specialized career paths, working hard, pursuing your passion, and earning strong grades at a quality public university or affordable state school path can be by far the smarter financial decision. Don't go mortgaging your entire future chasing a big name on your diploma unless you're absolutely certain the long-term payoff will make the extreme cost worthwhile, which often times it won't.

If I were to go back in time then I'd probably have gone to university abroad for 2 years and then transferred to keep the "brand name" on my diploma and fill my ego :)