Dear Mr. Berko: My husband and I are in our 30s and make about $87,000 a year. We have a 10-year-old son, and we want him to go to college and become a doctor and make a good living. We're told a bachelor's degree will cost at least $125,000 in 2027. That's terrible. What can we do? Our son isn't brilliant. He works hard but gets B's and C's.
-- HO, Springfield, Ill.
Dear HO: Kids who get B's and C's in America's schools aren't college material. Even my dog, who doesn't bark English well, could get B's.
All reports are in. College costs could grow by 50 percent in the next 10 years. Life is officially declared unfair. Calm down; take three deep breaths and hold it for 20 minutes. There's no way, short of enormous luck, you guys could accumulate $125,000 by 2027 for his bachelor's degree. And med school would cost $200,000.
Forget about sending your kid to college. Repaying a $125,000 loan for tuition and books over 20 years at 7 percent would cost you about $1,000 a month. In 20 years, that would be $240,000, or $115,000 more than you borrowed. Don't listen to those advertisements claiming that Jack, who graduated from college, earns more than Jim, who didn't get any education past high school. If you subtract Jack's tuition costs plus the four years of income Jim earned while Jack was in college, it's probably even-steven.
For many of America's children, college is a waste of money and time. Too many classes are taught by academics with little private work experience and zero teaching skills. Many academics can't make it in the real world, so they teach. And if they can't teach, they become department heads. Frankly, much of what is called education today is really an expensive isolation from reality. It's said that the real reason colleges exist is to seed the NFL and NBA with football and basketball players and provide coaches for professional teams. Education is a secondary goal. Nobody thinks of Ole Miss, the Sooners and the Crimson Tide as academic institutions. Today's colleges are enormous bureaucracies that are living, breathing organisms with a survival instinct stronger than the sum of their parts. As enrollments increase, colleges demand more money to grow their bureaucracies. In this process, they become bigger and stronger, but certainly not better.
If your son wasn't born into money or privilege, if he lacks a skill set placing him at a competitive advantage to his contemporaries and if his IQ isn't markedly above average, then your high achievement dreams for him must end. Get realistic. Your son is an average lad, so all he probably will earn are average rewards. And that's fine!
Technology is now at a boiling point, and many good folks in our society are politically, socially and economically unprepared to cope. And as we embark on the fourth Industrial Revolution, economists Carl Benedikt Frey and Michael Osborne, both Ph.D.s at Oxford University, tell us that 40 percent of today's jobs will be lost to automation. Many colleges (high schools, too) teach mostly Whac-A-Mole-like skills and have failed to help students become productive and competitive in this economy. Only a blithering idiot would spend $125,000 (plus $115,000 in principal) for a bachelor's degree. And be mindful that $125,000 compounded at 7 percent annually would grow to $3.7 million by the time your son is 60.
If you want your son to be wealthy, advise him to get elected to political office. Even though most folks today would rather have dinner with a pedophile than a member of Congress, he could make millions as a federal politician. But if your kid is unelectable because of a criminal background, then advise him to become a lobbyist or a union official. If he lacks the brawn and rage to be a union official or the forked tongue to be a lobbyist, then tell him to join the French Foreign Legion. He'd return to you as a real man.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at email@example.com.