An Investor’s Guide to the College Decision and the Math Most Families Never See
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The college investment, audited by an investor
The median four-year college graduate now loses money compared with the median high school graduate. The gap runs $82,371 in lifetime after-tax net present value at full cost of attendance, and about $17,500 even at the median net price after aid. Most families do not know that. Few people are running the math the way an investor would.
I have spent more than a decade building a financial model that does. It spans nearly 6,000 institutions, including 1,679 four-year degree-granting schools and over 26,000 distinct degree combinations. This book applies that model to the college decision the way a consultant applies financial analysis to any investment. Costs. Cash flows. Time value of money. Risk-adjusted returns.
What the Book Finds
- At about 79 percent of the four-year colleges with enough federal data to measure, the median graduate ends up behind the median high school graduate at full cost of attendance, and at about 58 percent even at each school’s own net price after aid.
- Federal aid policy is mispriced in ways that quietly push families into bad math.
- Three alternative pathways can produce better returns than the median four-year residential degree for students who complete them, sometimes dramatically so.
- The College Wage Premium headline number that everyone repeats does not survive a real financial audit.
This Is Not an Anti-College Book
College was transformational for me. I attended Baruch on a full scholarship. I earned an MBA at Indiana with a paid stipend. Both summa cum laude. The math that worked for me still works for some students at some schools. The book identifies which.
Who It Is For
- Families weighing whether to drain retirement savings for tuition
- Students considering five or six figures of debt
- Counselors advising both
- Anyone who has heard that any degree is better than no degree and wondered if the math actually supports that claim
Get the Book
We Need To Talk About Higher Education is out.
About the Author
Leon Shivamber trained at McKinsey and Company and built New York Consulting Partners with Elizabeth Haas Edersheim. He has spent more than four decades helping organizations see what insiders missed. He writes at shivamber.com, and the companion analysis tool runs at collegeroi.org.