Debt Free U–Investing in College and Choosing a Major

Debt Free U Cover Image Zac BissonnetteIn yesterday’s post on financial aid, I introduced Zac Bissonnette, a Twitter pal, who has written a new book–published yesterday–called Debt Free U:  How I Paid for an Outstanding Education Without Loans, Scholarships, or Mooching Off My Parents.  Once again, I’m pleased that Zac has offered to write another post to give his views on whether it’s a good idea to think of “investing” in college and on the perceived perils of choosing the wrong college major.




Why is it dangerous to think of college as an “investment”?

When I look at all the data on the returns of going to college and of going to one college over another, this is what I conclude: College is perhaps the best case of what economists call diminishing marginal utility you will ever find.

In other words, the long-term return on getting a bachelor degree at the lowest possible price is quite high. But  when you start to spend more than the minimum required, the marginal return plummets and it very quickly goes from being an investment to being consumption.

Think of it in terms of cars. People say all the time “A car is not an investment”. But that’s actually not true if you need a car in order to get to work. If a $5,000 car allows you to get to a job that pays you $50,000 instead of sitting at home doing nothing, that $5,000 car is a fantastic investment! But buying a more expensive car will not increase your income at all past the point that a solid reliable cheap car will. So once you’ve gotten to the price you need to get reliable transportation, any money you spend on the car stops being an investment and becomes consumption. College is exactly the same.

How important is choosing a college major in determining future financial success—or happiness?

I look at some research in the book that shows that choice of major is not nearly as significant in terms of its impact on financial success as people think: what matters its the career you decide to pursue, not what you happened to major in.

Clearly there are a few majors that really do track very directly with specific careers that you can’t get without that major. Like engineering and accounting, which are great if you want to be an engineer or an accountant. But beyond that, people shouldn’t fret too much about major. People get entry-level jobs in all sorts of fields with all kinds of degrees, and most employers are more interested in your GPA, internships, and work ethic than they are in your major.



Zac offers some very strong opinions about college as an investment, and it’s hard to argue with him.  You cannot really know the value of your an expensive college education–in dollars and cents–until you have lived your entire life.  Even then, it will be virtually impossible to put a dollar value on that education in a way that isolates variables in any convincing, scientific way.  Are my earnings today a direct function of my Ivy League education?  Or my graduate degree?  Or my experience as a high school teacher making a whopping $14k per year? Or my sparkling personality?  Or the quality of friends I make on Twitter?

There is no telling. So when buying a college education, you really need to think about those other values. Does this education have other values that are not captured by economics alone?  And on the other side of the equation, is there something else I could do with these dollars earmarked for tuition that actually does pay a predictable return–in economic terms?

These are the sorts of questions that Zac–and I–encourage parents and students to really think about as they are selecting the right colleges for themselves.


Mark Montgomery
Educational Consultant


Published by Mark Montgomery

Mark is a leading educational consultant. His experience as a professor, college administrator, and youth mentor help him guide students from around the country and around the world.

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  1. HOORAY! Two people with the voice of sanity on the “ROI” of an education. The investment required for an education has become totally unrelated to its “value” to the rest of your life. From the perspective of a 60-year old grandmother of two, I can honestly say it is just 1 ingredient in the recipe of your life. It is NOT where you went or what degree you get that counts! No one school or degree can guarantee ANYTHING. All the student can do is make sure they take maximum advantage of the investment they and their parents make.

    Sadly, I know way too many students who have Ivy League degrees, monstrous debt and no real skills because they did NOT take advantage of the college and skated through.

  2. Thanks for your comment, Linda. College is an important decision in one’s life. But it is not a “life or death” decision, and the choice of where to attend must be balanced against the very real–and measurable–economic costs of attendance. It’s important that everyone in this business be clear that it may be very unwise to break the bank in order to achieve some ethereal idea of educational nirvana. Most colleges will not provide this sort of no-nonsense advice to students and parents. Therefore the job falls to us!

  3. I couldn’t agree more with the fact that it doesn’t matter what college you go to,as long as you learn. Knowledge is power. And you have to have a passion in what you do.

  4. Thanks, Hector. Knowledge and passion together create a powerful force for each of us. Thanks for writing in.

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