What an undergrad degree is worth
From today’s USA Today:
Darla Horn, 26, acknowledges she didn’t give much thought to the cost of college when she enrolled at State University of New York in Purchase. [...] Because she didn’t qualify for financial aid, she took out student loans, graduating in 2005 with a double major in journalism and anthropology and more than $80,000 in debt.
That’s way too much debt for an anthro-journalist. But is it too much for an engineer? Is it too much for an actuary?
When I was buying a house, the rule of thumb was that you could afford a home three to four times your annual income. It feels like there should be an equivalent rule of thumb for how much you can spend on your education versus average salary of your studied profession. Or, hell, a web calculator.
In a few minutes of Googling, the closest I could find was this:
Don’t take out more student loans than what you expect to make in the first year. This rule of thumb puts a reasonable upper limit on how much in student loans you should take out, which is a good thing, but doesn’t paint the whole picture.
There are some jobs (like screenwriting) in which starting salary is almost impossible to predict, and others (like law) in which salary goes up quickly based on experience. But rules of thumb are helpful because they simplify things, and this one seems a good start.
By this measure, an actuary could take out about $50,000 in loans, while an electrical engineer could feel okay taking on $55,000 in debt. Darla, meanwhile, should have capped her loans at $33,000. (All salary estimates from PayScale.)
What often gets lost in these discussions is that relatively few students end up paying full freight. For four-year, private American universities, the average tuition discount rate for fall 2007 was 39.1%. The price on the sticker isn’t necessarily the price you pay.
But if you’re looking to study a low-paying field, do Future You a favor by being honest about the cost.
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September 4th, 2009 at 1:59 pm
Very interesting. I think it’s important to take into account the failure and success rates in each given career, too. A screenwriting degree doesn’t make you a good writer, and doesn’t equal you’ll get a job, you know? I wonder if there are as many unemployed people with law degrees as there are screenwriters trying to make it.
September 4th, 2009 at 2:41 pm
John -
Excellent point. I’ve had this conversation with friends a million times. I skipped grad film school, but sometimes wonder if I missed out. Most of the time, I don’t regret it. The part I think I missed out on is the collective effort of working in hand in hand with fellow students to create movies. But is that worth $100k in debt? I don’t think it is. I have friends who’ve done film/law school etc and now have low paying jobs and are straddled with more than $100k in debt – it’s been an albatross they can’t get rid of. That debt will be there until they pay it off – you can’t file for bankruptcy and just erase the debt – school loan debt NEVER goes away until you pay it off in full.
Instead of falling in love with the marketing literature or the dreamy aspects of a potential college major/grad degree, we owe it to ourselves to ask what it is we’ll be learning and how much value that education will have in terms of $ after college. Are these things you can learn on your own through books/practical application, or must you take these classes? Are these humanities classes or are these classes that qualify you to practice a profession that requires these classes, ie medicine, pharmacy, engineering, etc. Career coaches write extensively about this – the myth that college will solve your problems. In a lot of cases, people do it all wrong like the journalist/anthropologist with $80k in debt and up regretting it for a long, long time.
September 4th, 2009 at 2:45 pm
To answer your question Amanda. http://www.nytimes.com/2009/08/26/business/26lawyers.html?_r=2&pagewanted=1&em
September 4th, 2009 at 2:50 pm
I also find this interesting. But my take is a bit different. It is extremely, extremely difficult for non-trad students (like me and presumably, based on her age, like Darla) to work part-to-full-time, attend classes at the university level, and actually graduate while maintaining a life-style that allows us to eat well and have some time to enjoy ourselves. Once I decided what I wanted to do (playwriting) at age 25, I was hell bent on attending a good school, learning as much as I could, and setting myself up for grad school and a successful career. The cost didn’t really play a part in it for me. In fact, most of my student loans, grants, and scholarships ended up being spent on paying my rent and buying groceries. I stopped driving my car and started riding my bike. I moved closer to a shuttle that took me to school, and just a couple of miles from where I worked. Those lifestyle changes allowed me to finish school, continue working full-time, and live a happy but simple life. And despite all of that, I still graduated with a fair amount of debt. Admittedly no where near as much as Darla, but much more than my fellow classmates (many of whom were 5-7 years younger than me and who had significant financial support from their parents) The bottom line: do what you love. Work hard at it. Live simply. Get your degree, and control your expenses as best you can.
September 4th, 2009 at 3:07 pm
I have two friends who graduated from the filmic writing program at USC (not a cheap school) and never sold a script. One, last I heard, owns a Dairy Queen in the midwest, the other one has been in radio and TV news for the last few years. In fact a lot of their graduating class either left showbiz or has ended up in other areas of it, rather than as screenwriters.
Unless you’re in a very specialized course of technical study like engineering, pre-med, or accounting, it’s very likely that you’ll find your degree and your career don’t follow the same topical thread. There are lots of History and English majors who went on to get their JD or MBA. I got a degree in Creative Writing and I almost went to law school.
Life hands you a lot of surprises, and if you don’t have a very specific technical interest, the best idea is to study something you’ll enjoy so you remain engaged and get good grades, so you can keep your options open. In many cases, that undergrad degree is just going to help you acquire the basic critical thinking skills that can take you along a wide variety of career paths.
September 4th, 2009 at 3:32 pm
IMHO anything is unpredictable. It’s hard to get a good job today, but college rates are rising. Eventually my film studies will be around 20.000 $. I’d like to make it as a screenwriter. Considering that the screenwriting part was only like 1% of my entire studies, it seems like a hoax! But therefore I might also get chances to get a job in a more film technical field. Who knows…
The question is, does education really have to be THAT expensive? First of all, everybody got a right to learn whatever he wants and secondly the high rates might cause a decrease of professionals in special / certain fields.
As Amanda has already stated, a degree doesn’t necessarily tell how good you are in a certain field. I totally agree with you. I’ve always been wondering… what’s a grade / degree all about? It measures your efforts during a fixed period of time. E.g. if today one applied for a job with an A in Maths, chances are good, he might have already forgotten most of the stuff he learned from January to July 2008, but employers would definitely prefer him instead of a C-grader (who might have taught himself more about Maths than the A-grader will ever know and simply relies on his better certificate).
Thus, I also think no degree makes one a good writer. You may learn the principles about screenwriting, but not the ideas (which make(s) screenwriting a piece of art and more disappointing for the ones who think a good degree may open all doors).
September 4th, 2009 at 3:55 pm
So, you’re saying I should drop out of film school now, before I go so massively in debt that ONLY selling a screenplay will ever save my financial life?
September 4th, 2009 at 5:21 pm
I go to SUNY Purchase! For Dramatic Writing! As you said, impossible to predict what will happen.
September 4th, 2009 at 6:08 pm
Your response to the issue isn’t surprising given your views on the arts as a business but I found it kind of laughable that people with anthropology degrees are expected to judge their future income based on other anthropologists. What percentage of anthropology majors end up anthropologists? History majors? Screenwriting?
This also assumes that the reason you went to college in the first place was to prepare you for professional life rather than to grow and to be exposed to many things your prior life didn’t provide.
College is not vocational school, and there is a great difference between having a career and having a life. They’re not exclusive of each other, but understanding your life is more important than understanding your job.
College is not necessarily a time to choose what career you will have but rather to develop your mind. A not-unimportant side effect of this is that afterward, it can grasp the diverse concepts on-the-job learning requires.
For what it’s worth I studied Computer Science as an undergrad and never wrote another line of code after graduation.
September 4th, 2009 at 7:01 pm
This is a great observation. Another really good rule of thumb for borrowing I’ve heard is to only lever on assets that increase in value, like education, a business venture, the house you live in, etc. Bad things to lever would be a car or a vacation.
September 4th, 2009 at 7:47 pm
School is expensive.
Pick one major. Pick a good public school in-state to save money. Graduate in four years. Get good grades.
And…don’t major in journalism. Newspapers are imploding. The few jobs that existed 5-6 years ago have literally been wiped off the map. They don’t exist. I would say 90-95% of the J-schools should probably be dismantled as well. As in film, I could provide a looooong list of names of journalists who never attended J-school. And a lot of the Big Name print journalists in New York tend to work on a freelance basis and – minus any big book deals – probably net $40-$75k a year. In New York.
A BA in Humanities is a good solid education. An MA in Humanities can be a complete sink hole. The NY Times has had some great op-ed pieces about it lately.
September 4th, 2009 at 8:53 pm
I recently graduated with a degree in journalism.
Journalism, I feel, is an interesting case. Whereas it used to be perhaps as close to a trade as a liberal arts major could get, today, because of a raft of problems that the industry still hasn’t solved, it’s probably no better than your average degree in Pottery.
I think that this recession has pushed a lot of similarly promising career paths into the do-or-die realm of liberal arts. You just can’t predict that sort of thing when you’re seventeen (!!!) and trying to decide what you’re supposed to be for the rest of your life.
September 4th, 2009 at 9:06 pm
This is why I am so very glad that my mom saved so much throughout my childhood. Because of her and the trust fund she set up with my grandparents (a decent chuck of which went bye-bye when the stock market crashed) I will be able to leave school with only a few thousand dollars of debt (she made me take out a loan of about 3,000 bucks so that I would have a stake in my future).
Unfortunately, though, screenwriting is all I want to do. I am physically incapable of seeing myself work anywhere else. Well, other than Walmart. So I have to options: make it in Hollywood, or work at Walmart for the rest of my life. That “or” part is incentive enough.
September 4th, 2009 at 9:08 pm
This is why I am so very glad that my mom saved so much throughout my childhood. Because of her and the trust fund she set up with my grandparents (a decent chuck of which went bye-bye when the stock market crashed) I will be able to leave school with only a few thousand dollars of debt (she made me take out a loan of about 3,000 bucks so that I would have a stake in my future).
Unfortunately, though, screenwriting is all I want to do. I am physically incapable of seeing myself work anywhere else. Well, other than Walmart. So I have to options: make it in Hollywood, or work at Walmart for the rest of my life. That “or” part is incentive enough.
September 4th, 2009 at 9:48 pm
Not sure what you’re trying to say with this article…do you think undergrad education is worth the cost? Should young people attend undergrad only if they’re sure what field they want to go into? Or is this just a general money-saving tip?
@Andrew (#5): you’re absolutely right. Undergrad isn’t trade school. Not remotely close. It’s okay to go to college and not know what you want to do, not least because the people who think they know what they want to do almost never end up doing it. Ironically I’m in an opposite situation from you: went to undergrad for Dramatic Writing and now starting to freelance as a web designer.
September 4th, 2009 at 10:26 pm
@Ryan:
Not saying drop out at all. But make sure you’re getting value out of that expensive education — not just learning everything you possibly can, but by forging relationships with classmates that can function for the next 20 years. In a tight-knit field like filmmaking, that’s essential. A lot of what you’re paying for with film school is peers and access.
@Mike:
I think undergrad education is worth a price. But it’s not the same price for all people in all situations. So much of how we talk about schools boils down to “go to the best school that accepts you.” As if cost shouldn’t be a factor. But unless you’re really, really rich, it will be.
I’m on the Board of Trustees for my undergrad university (Drake), and having seen all the budgets, I can tell you that college costs a lot because it costs a lot to provide.
It’s fine to go to university unsure exactly what you want to do. This time of your life should be about adventure and growth and discovery. But if you’re going to do an intellectual walk-about, consider whether it’s better to do it someplace less expensive, where every week isn’t costing you hundreds of dollars. You may decide the more expensive university is worth it. But you’ll at least have done the homework.
September 4th, 2009 at 11:41 pm
Actually, it’s not all that hard to predict the income for your first year of being a screenwriter.
Based purely on the odds, it’s going to be zero.
And year number two will probably be zero, too.
At some point that may change. And sure, you may be (like John and others) one of the fortunate exceptions. But I wouldn’t buy a house based on that.
September 5th, 2009 at 1:38 am
I also question why people spend the time on a double major. Unless you’re able to earn 2 degrees without doing any additional work, it seems like a waste of time & money as you won’t be payed any greater amount at a job because you have 2 bachelor’s degrees.
September 5th, 2009 at 5:13 am
bt wht about the ones who just fall off the radar, randomly. i guess the govt. shud fund them! sigh…
September 5th, 2009 at 5:53 am
Anyone who wants to study humanities for self improvement can do so free of charge at the public library.
September 5th, 2009 at 6:01 am
@John — But is “peers and access” worth the 30-40 thousand dollars a year spent on film school? Considering how many film school graduates still can’t sell a script? And maybe never will?
It seems like once you have the basic skills of screenwriting down, the “education” isn’t necessatily going to make you any better of a screenwriter. You are literally condoning spending forty grand a year to, you know, “get to know some people” because ten years down the road they MIGHT be established enough to give you a leg up and vice versa.
I know relationships are important in the industry, but that doesn’t seem like any sounder advice than the girl that paid 80 grand to be a journalist.
Since a finite number of movies get made a year, how many screenwriters with film school degrees actually are able to make a living at it? Ten percent? Less? I’ve gotten to the quarterfinals of the Nicholls with two different scripts — and I taught myself how to write. The way I figure it I’ve got an equal chance as the no-talent but expensive degree slob does.
September 5th, 2009 at 2:19 pm
Hollywood is one of the few places you can still make it without an education. Some of the most lauded people in Hollywood, whether they be directors, actors, writers…whatever – have never set foot inside of a college or university.
This phenomena has no parallel to any other industry. Besides some successful self made entrepreneurs, you obviously never hear of the world’s top surgeons, architects, scientists, or attorneys as having not attended post secondary education.
September 5th, 2009 at 9:15 pm
Mark Twain had plenty of financial problems. Huck Finn…faked his own death didn’t he?
They say in acting, don’t let them catch you doing it.
September 5th, 2009 at 10:56 pm
@John: Okay. That’s definitely something I can get behind.
I think part of the problem is that it’s so abstract: a high school senior with no real concept of money anyway is not going to grasp the concept of paying off loans four years later, especially when deep down s/he assumes s/he’s going to get a job right after graduation because that’s just what happens. Maybe the economic situation is changing that, I don’t know, but I definitely remember that that was the prevailing attitude when I was in high school.
September 6th, 2009 at 8:44 am
Great tip. I’m a college Senior now and I’ve been piling on more loans each year (paying some of the tuition with cash, but not nearly enough). I’m looking to be a filmmaker, but of course, there’s no predictability in that. I’ve been thinking about doing a Grad School film program (like NYU, Columbia, AFI, etc, etc) if only to stay out of the bad economy for a while. But I’m really very wary of tacking on another $100 grand or so to the debt I already have. You always hear stories from directors saying when they finally made it they had to “unlearn everything they learned at film school.” And then of course, you hear about some directors who say they’re the only one from their film school class who even got to become a director! Is it really even worth it? Or should I just take what ever film industry related job I can get and use all my free time to PA and send out query letters?
September 6th, 2009 at 9:51 am
@Adam… “Hollywood is one of the few places you can still make it without an education.” – “This phenomena has no parallel to any other industry.”
100% in your head. In fact… I’d go as far as to say that, those statements are only even perceptibly true so long as you hold no real independent value for yourself, AND restrict your options to ONLY careers based on seeking either permission or validation from, “An Important Man”.
Dude… I dropped out my sophomore year in high school. (And for that matter, so did Bon Jovi.) — My oil painting booth at the LAGUNA Arts Festival sells out in the first 2 weeks. – I got my first recording contract at 17. – First video game soundtrack when I was 25. (IN TEXAS) – Made 125K/yr as a financial consultant at 26 (IN IRVINE). – And won Artivist at 28 (for my severely non-hollywood human rights films) – the same year they started paying me to lecture at UC Irvine. – That was right before I found out that the founders of the countries largest animal sanctuary, and largest surfing school didn’t graduate either. Incidentally, neither did many of the leading Poets, Boxers, Patent Holders, Whale Rescue Teams, Children’s Authors, Drug Dealers, Fashion Models, War Heroes, and Bishops.
But hey, if you cant find ONE Outside-Hollywood arena to succeed in without a degree, and yet somehow I slipped on a banana peel and landed on 5…? – No big… I’m sure the excuse factory is hiring.
September 6th, 2009 at 10:24 am
Yeah okay, Synthian. This is why reading comprehension is so important. In all your chest pounding you missed an important line: “besides some successful self made entrepreneurs”. That more or less covers your ventures.
And FYI, I only went to high school and have been more or less self employed ever since. Now I’m directing my third feature (each one I wrote myself) in November, which stars an Oscar winner, and I’m being repped at CAA. You?
September 6th, 2009 at 12:22 pm
Actually I listed 12 people in 12 huge industries… plus the 5 that I’m in…
You weren’t even close to covering them… Not by a mile.
Your statement was that the phenomenon has no parallel in ANY other industry.
So I brought numerous examples. – You ABSOLUTELY have the right to reject them. – Its your box, and you completely have the right to think inside it. — I just get all girly when I see someone telling other people what they’re not capable of is all.
I’m not about to take a stab at your industry, but its nice to know that your story backs me up as well. :P
Reading comprehension? – Really?
Ok, you win. — I’m sorry for being uncouth. – I honestly am. – I’ll sheath my shit and put up a peace sign for whatever turmoil comes my way from mouthing off on this posty thingy. (A needle is dropped. Bob Marley music begins: Ending The War)
September 6th, 2009 at 1:03 pm
Peace bro. I agree with you completely. Education is not the be all end all.
September 6th, 2009 at 1:16 pm
http://www.strangehyacinth.com/mediadump/music/3birds.mp3
September 6th, 2009 at 1:26 pm
Oh yeah, I bet my arrogance can beat up your arrogance.
September 6th, 2009 at 1:38 pm
Nu-uh! :)
September 6th, 2009 at 4:14 pm
I’m sort of on the other side of this in that I’ve just graduated from undergrad (English/Film double major) at a top school with $100,000 of debt. At 18 this seemed like it wasn’t a big deal, but I’m quickly learning how difficult it will be to pay back, especially coming from a low-income background.
Still, I can’t help but feel my education was worth the cost. I worked with some of the top professors in both film and English and came out with both a strong technical background in post-production and a solid foundation in writing. Maybe I’ll change my mind if I’m still unemployed in a few months, but the community I came from offered little opportunity for personal growth and education compared to what I experienced at a large university.
That said, I’ve met people who lived in better communities for whom college offered little more than what their own parents had provided them with, and in those cases I completely understand how college, especially undergrad, is more of an after thought. This was especially true for kids who had parents in the industry with a job already promised to them. I guess I just think that whether or not the cost is worth it depends on more than just school and major, but also an individual’s background experiences and alternate opportunities.
September 7th, 2009 at 12:52 am
I did my undergrad work at the U of I in Champaign-Urbana. My father, who paid for the school, told me to study what I wanted since it might be the last time I got the chance. It was a generosity his family had not shown him. I studied English and Rhetoric. I was an in-state student, so it was cheap. I constantly met people who asked, “What are you going to do with English? Teach?” Apparently this was the only cost-effective use of the degree to them and I often answered resentfully that there was plenty to do if you opened your mind a little. Naturally, I had no idea what I was going to do.
But I got lucky. My first two years out of school, I worked at the Washington Post as a News Aide on the strength of a few letters I sent out looking for work (back in 1987). I freelanced articles to the paper and learned I wasn’t cut out for journalism.
I moved to Chicago to run a well-known book store (Stuart Brent Books on Michigan Ave) before heading back to a 2-year vocational school for advertising. This time I borrowed 20K (which was more than the whole amount of my 4 years at the U of I) and it was my parents who asked me why I was borrowing money to get into a business that they felt anybody could get into.
I’d never borrowed money before and it felt like the first real commitment I’d ever made to something. I got a job as a copywriter in Minneapolis and paid the loan off in 4 years.
After 10 years in advertising, however, I got an offer to go to Columbia University to study playwriting. I borrowed the freight again. All told, I owe (today) 74k for which I received 3 years to write anything I wanted, explore, meet people and get exposed to completely new ways of doing things. I haven’t made a dime from any play I’ve written (and I even wrote one, “Beyond the Owing”, about the educational debt problem which was produced this past summer in Minneapolis) but I don’t feel cheated. After all, finding a concentrated time to do what you love is rare. And, as someone who’d already spent a good amount of time writing for money only, I needed that time. No bones about it – the degree (an MFA) has not been remunerative so far, but I ended up doing some things that I never would’ve otherwise and that I’m fairly proud of.
When I get asked by others whether an MFA in something like playwriting (quite possibly an even less profitable degree than anthropology) I ask them, WHY do you want to go? Getting rich and being famous won’t cut it (which several of my classmates bitterly discovered). But neither will just getting by. I’ve come to believe that if you are studying something that you don’t love and aren’t truly committed to, no matter what a deal you get on the tuition, you will be wasting your money and something much more important, your time.
I’m cautious about logic that says an education should pay out what you financially put into it. You rarely get anything out of school if you don’t put yourself into it. And the better the school you go to, the more likely you are to be with people who are as serious about the choice to be there as you are. (Please note, I do say “more likely”.)
I’d also point out that when I read biographies of successful people I admire I discover that there are only two truly common threads that explain their success – a serious commitment to what they were doing and luck. (Gladwell’s “Outliers” seems to confirm this.)
Anyway, certainly, the consequences of debt are serious. But the consequences of not trying out your dreams are even more serious. And until someone can figure out what a dream is worth, questions like “What is an undergrad degree worth?” aren’t as valuable they might be. Unless you’re an accountant.
September 7th, 2009 at 11:35 am
As a graduate of SUNY Purchase (albeit 16 years ago) I don’t see how you could possibly rack up 80k in bills unless you went for 8 years or had a HUGE substance abuse problem.
September 7th, 2009 at 3:21 pm
Adam, wherever you went to school, you didn’t do well in math. Out of state tuition at Purchase is about 12K. Room and board is about 10K. Add it up and times it by 4, you get more than 80K – no substance abuse problem needed.
As to the premise that you shouldn’t take out more in loans than you’ll make in the first year after school, this is generally unrealistic for most and the figures show it. From the “SmartStudent Guide to Financial Aide” at http://www.finaid.org/loans/: “Two-thirds (65.6%) of 4-year undergraduate students graduated with a Bachelor’s degree and some debt in 2007-08, and the average student loan debt among graduating seniors was $23,186 (excluding PLUS Loans but including Stafford, Perkins, state, college and private loans).” Lawyers, doctors and architects have a lot more school and borrowing to do before they can practice, so it doesn’t get better as you keep going.
September 7th, 2009 at 3:52 pm
I also went to SUNY Purchase and have been a long time reader of this blog. I’m only like 28K in debt. I was considering grad schools and even with scholarships, I’d end up being 60-80k in debt with undergrad and grad combined and decided it wasn’t worth it right now.
September 7th, 2009 at 10:40 pm
To Matthew Gipp:
Re: Journalism…
The economy isn’t the problem. Media in general is undergoing a complete overhaul – print journalism, television journalism, visual entertainment (TV, movies, etc) – because of the Internet. Journalism jobs don’t exist on the same scale anymore because the traditional employers – newspapers, television stations – aren’t generating the same level of advertising revenue that they once did. Their business models have been broken in half and they don’t know how to fix the problem. Newspapers and TV stations are laying off staff every week. Those jobs aren’t coming back. Your alternative is working for a nonprofit daily online newspaper – such as http://www.voiceofsandiego.org – or working as a freelance reporter who specializes in a topic and sells stories to newspapers and web sites – though I don’t know how stable or realistic a prospect this is, to be honest.
But if you’re reading John’s website, I suspect you have an interest in movies. If you’re just graduating college, maybe bite the bullet, move to LA, get a job within the industry and bust your backside to become successful at whatever it is that truly interests you.