Don't waste your money on college

Student Loan Debt

I often sit in coffee shops where I overhear conversations about college, finals and financial aid. And we all know the end result: tens, if not over a hundred thousand in student loans. And for what?

Let's take a look at the typical careers for the first 10 years after graduating college: Retail clerks. Baristas. Receptionists. Independent creatives (we'll visit this one later). Or best of all, working back at a university, usually in recruiting new students, at the same school they graduated from. Do we really need tend of thousands of dollars of debt to land us those jobs? Is this what we thought college would do for us? And do we need to spend the best years of our lives doing nothing but stressing about paying off loans that landed us in this mess in the first place? If I were in that position, I would march into the administration's office demanding my money back.

Of course there is merit of a college degree for certain jobs where it is necessary to be licensed, but for the vast majority of us, it is real-world experience, not long-form Scantron tests, that ultimately decide our fate. So why do we all go to college? "You won't get hired without a college degree" is usually the retort that a parent will tell you. But now, in 2015, I think it's time to challenge that argument.

My Personal Experience

I wouldn't have gone to college if it weren't for my parents who mandated it as a life requirement. I basically went kicking and screaming. In high school, I developed a knack for video production and made a good amount of money producing live event DVDs for schools and musicals. I was fortunate enough to have parents who supported my creativity in this, and allowed me to spend a lot of time in high school developing these skills. But when it came to college, I still had to go. Naturally, I ended up pursuing a degree in communication, what I now know to be "the easy degree you get when you have no idea what you're going to do with your life."

From my freshman year, I had no interest in my classes. I cared little about "college life" and decided to find an internship as a freshman. I wanted to do something with my life! (I was required to do a 1-semester internship during college.) I think I ended up doing 4 or 5 internships in total. And for me, this was the best "career move" I could have made. I interned with a record label, a concert promotion company, video production company, and a company that build websites for the mortgage industry. I started out managing a Myspace page, then email campaigns, then a website, then doing work in Photoshop and even handling technical-sided customer support calls.

Before my internships, I had built a personal website (back in 2002 at the age of 15) but aside from that, I didn't do much with the web. But it was during my internships that I began to find a niche for myself.

Back in college, I spent the majority of my college classes sitting in the back row, building $500 websites for clients that I would find on Craigslist. Over the years, I began to build a portfolio. I had real-world skills I was able to add to my resume. These weren't just credentials on paper. I was actually building things for real people, and for a real purpose. As a junior in college, I had enough experience building websites where I was able to jump my freelance rate from $15/hour to $50/hour.

Just Do Good Work

You can compare my tract with the long-lost concept of "apprenticeship". And now we're back to a society where the focus in on production, not titles. If you can show real-world experience in many fields, you're likely to get hired, regardless of the letters behind your name. (I've never been asked for my college transcripts, and in my time of hiring people, I've never really cared either.)

Of course I'm not negating the need for college for those who want to be doctors or lawyers or work in highly regulated industries. I'm simply saying that for most of us, college (in terms of landing a career) is just a big joke now.

Millennials, in the new economy, hold down jobs for much shorter periods of time and tend to work as independent contractors. There is less loyalty to employers because employers are less loyal to employees. But fortunately, because many employers look for experience over degrees, that gives job seekers a lot of opportunity to stack their resume. Independent creatives - artists, musicians, and digital creators don't need college, either. They just need tangible skills that will land them a gig in this new economy.

Trade Schools

When we hired people at Preact, we looked for people with real-world skills. We did hire a couple developers who received the equivalent of a trade school certificate but who didn't go to college for a degree in their field, which I think is a great alternative to college. I really wanted to attend The Art Institute because of their focus on resume-building skills and teaching tangible knowledge about software programs, although my parents ultimately nix'd that decision. Today, organizations like General Assembly teach anything from software development to product development to digital marketing. They're not accredited, but not many people care about that anymore. That's right, you don't have to spend 2 years of college re-learning the basics about English or simple math (although these are very important and hopefully were learned by high school). I should point out: most job applications list a college degree as a requirement. However, I've never found this to be the case, instead allowing "relevant experience" as a satisfactory qualifier.

The Changing Landscape

Thanks to the internet, you can now you can teach yourself almost anything you want to learn. Between tutorial sites like Lynda.com, or Youtube, or this great resource called Google, you can learn these skills faster than ever before. No longer is higher learning held within the confines of the great walls of universities. Aside from the social aspects of college, there are few benefits for a future career than there were decades ago.

Summary for High School Grads

The massive inflation in college prices is unlikely to be stopped anytime soon. Whenever the government gets involved and starts throwing their money at things, prices never go down because they're always willing to pay out. And with the false notion that college is a requirement to survival in life, there is no shortage in kids looking to get into college. With limited supply, high demand, and a government that thinks throwing more money at the problem is going to solve things, there is no recipe for a logical solution in sight.

So my recommendation to recent high school graduates is this: Live at home for a couple more years: Save some money. Find an internship or two. Work hard. Learn as much as you can from people who are doing things. (If someone is paying them money for something they're doing, they're clearly doing something right.) Then when you have the right experience and the time is right, start jumping up the corporate ladder.

The reason businesses enjoy hiring interns is because they're cheap. The reason working for cheap is good is because you don't have a ton of expenses yet. It's a symbiotic relationship: They get the work done, you get the experience you need to climb up the ladder in society.

Stop buying into the lie that college is going to land you a great job and a successful life. The more likely scenario is that you'll usually wind up in massive debt and spend a good portion of your life trying to pay it off. Sure, you may have a fun few years meeting some new people. But I'll venture a guess you can find some new friends outside of the college experience while keeping $50,000-$100,000 in your pocket. And to me, that tradeoff is well worth it.

The only website that closes at night

The revolutionary thing about the internet is that it's "always on". Do some shopping at midnight in your PJ's? Yep. Watch a movie at 3 AM from bed? Absolutely.

Which is why I was astonished to discover a website that has "normal business hours" and actually closes at night. Of course it would be a government website, namely the Social Security Administration.


How did I discover this?
I recently heard it's possible to estimate your future social security benefits on the Social Security website, so I decided to try it out. But following the link that says "Estimate Your Retirement Benefits", I was greeted with a CLOSED message, which is probably the only website in the world that actually closes at night.

Turns out since it's 10:22 PM here on the West Coast, I'm outside of those normal operating hours for those East Coast servers.

Seriously, what in the world?

<rant> Please don't send an email like this to customer support

In this episode of "the life of a business owner..."

People say the darndest things when writing in to customer support. Here's a recent example sent in to FolioHD.

"My service is still not working. My business depends on the reliability of this website and if this can't be fixed I'll have to switch providers immediately."

Do customers think support people are more inclined to respond faster if they include a line like this? Do they subconsciously think a slight threat is going to get their problem fixed any faster?

The unfortunate fact is that 99 out of 100 times, the "problem" is a user error (at least in our case - in this particular instance, a misconfigured domain name). But when you're the service provider, it's never the customer's fault -- and I'll gladly take on their problem as if it were the most important thing in the world, but because I want them to have a good experience, not because of their tone.

There's just something inside me that hopes they don't correlate their slightly threatening tone to what got their problem resolved, because it really doesn't help.

</rant>

Disincentivized

  • It was announced today that illegal immigrants will now be eligible to receive back tax refunds even though they've never actually paid taxes.
  • Today I went to pick up a prescription that cost me over $100 because my new Obamacare insurance doesn't cover it. My old insurance was 1/4 the cost and covered everything.
  • I'm working on filing my taxes and am astounded at the amount of money I'm handing over to Uncle Sam. And I'm seeing less in return for it than ever before.

I'm beginning to wonder what the point is of working hard all day, sometimes nights and weekends. I work more than I should, to the point it sometimes starts to interfere with relationships and social activities and I have to constantly keep myself in check, but I've chosen to do it because I enjoy it and because I want to get ahead.

But with every action our government takes, they take away my incentive to actually try to get ahead.

Why should I work hard to pay for a $100 prescription, where if I made less money, I wouldn't pay anything at all?

Why should I work to pay my rent, when the government would chip in and help me pay for a place just as nice if I made less money?

Why is the government handing out my money who have done nothing to earn it and who haven't gone through the legal routes to be here?

This system doesn't work. The people on the low end of the pole have no incentive to work hard because they are being handed everything. And the people on the upper end have no incentive to work hard because they'll get the same benefits regardless of how hard they work.

Welcome to the new America.

Resort fees, dealer fees, convenience fees, and other bogus charges

Typically when we buy something, we're accustomed to paying the listed price, plus a mandated tax on the item. But recently we've become accustomed to seeing additional fees on purchases that aren't listed in the purchase price. This is already common practice for things like utility bills, cell phone bills, and car rentals. But over the past decade, this practice has extended to the internet in some incredibly shady ways.

Ever booked a hotel room and been forced to fork over an extra $15 or $20 a night at the front desk, on top of what you already paid to book the room? You may or may not have been aware of this charge called a "Resort Fee", a completely bogus charge some hotels are resorting (no pun intended) to, in order to maintain profit margins but still appear competitive on their price.

How does it work? Imaging you're filtering for 4-star hotels, then sorting by price, lowest to highest. "Wow," you say, "I found an amazing 4-star hotel for $90 a night!" Not so fast. If you look closely, you'll see a Resort Fee of something like $20 per night, payable to the hotel upon arrival. So what's going on? Well, for that hotel to appear in the top results for the price range, they lower their price but make back that amount in the form of a fee that isn't included in the price.

I recently came across an incredibly shady example of this fee on a Travelzoo deal:

"A resort fee of $15 per night is not included and will be paid directly to the hotel. This fee covers Wi-Fi, pool access, spa access (may be limited), fitness center access, newspaper, phone calls (may be limited), in-room coffee, in-room bottled water, self parking, valet parking and additional inclusions."

Travelzoo is all about great deals, but if you factor in the extra $15 you're going to have to fork over, you have to question if it's really that great of a deal. But the most offensive part is that this hotel is communicating this fee covers things like self-parking, coffee, fitness center access, and even pool/spa access! We all know even the most basic hotels have offered this forever at no additional charge. This is a blatant way to make back the profit they would have lost by actually offering a deal.

These tactics extend to things far beyond hotel bookings. Ever bought a car and thought you got a great deal? You should watch this video about the four square model, the model that every car dealership uses to make sure they make a certain profit on every car sale. Oh, and that dealer fee you may have paid from anywhere from $200-$750? Yeah, that's just a bogus fee - doesn't actually cover anything. It just goes toward making your purchase price appear lower.

Fortunately, there are some sites that actively try to give you an out-the-door price, which I really appreciate. Stubhub shows you your out-the-door price per ticket to an event. Southwest shows you the out-the-door price on an airline ticket - it includes all the bogus government fees.

I have declared war on these types of bogus fees. I try to avoid them as much as I possibly can and I hope I can convince you to do the same, when at all possible.