Radek Gadek took the side of the debate in which he argued that going to college is a good deal because it could "mean the difference between living paycheck to paycheck or finally living life." Although Mr. Gadek has some good ideas about saving money while attending college, a college degree does not guarantee you that you won't be living paycheck to paycheck. In fact it doesn't guarantee that you'll even have a paycheck at all. Many college graduates are finding themselves laid off, their job outsourced and no new jobs available especially for those over 50. "Finally living life" could mean that you're in the unemployment line like everybody else. A college degree is a ticket of admission to a corporate job providing there is a corporation that needs your services and then only so long as they need them. Your paycheck is entirely at their discretion. The self-employed, on the other hand, can never be laid off by definition.
Mr. Radek has a good point about attending community college and living at home if possible for the first two years. It is much, much cheaper than moving into a dorm at a four year school. And the first two years of college are basically a repeat of high school. They're just additional padding which provides job security for professors while giving you nothing in terms of job skills. I would add that community colleges are much more flexible and that you can combine work or a self-employed business along with attending classes. Many people have done house painting, yard work, house cleaning, handyman work or started a myriad of other businesses on the side while attending college. Some have found it more lucrative and rewarding to continue these businesses even after having attained a college degree! I remember Jack's College Crews that offered their services as painters and then built up such a good business that it seemed like Jack spent his whole life as a student. He kept the "College Crew" name even after he finished or dropped out of college and this became his career.
Now to Mr. Radek's point about going into business - that you'd have to borrow $50,000 to $100,000. First of all he is correct that it is much easier to get a student loan than it is to get a business loan. However, there are a lot of businesses that don't require this kind of initial investment or anywhere near it. Painting, cleaning, handyman and landscaping are just some examples. Secondly, with a business loan, if your business doesn't work out, you can go bankrupt and discharge your debt; with a student loan, they'll follow you to the grave especially with a private student loan which, until Obama's recent student loan reform, was all you could get. Now with the government back in the student loan business, there are finally some decent terms for student loans. The private student loans turned out to be nightmares for many students because there were draconian penalties involved if you slipped up and defaulted for any reason. Business loans, on the other hand, since they can be discharged in bankruptcy, encourage entrepreneurialism. Henry Ford went bankrupt several times before he was finally successful with the Ford Motor Company. Bankruptcy doesn't have to be a totally devastating experience. It clears the air and gives one the ability to start over while retaining basic assets one needs to live on. Student loans, on the other hand, even if they're from the government, I believe, can never be discharged in bankruptcy.
Mr. Radek implies that, if you don't have a college education, you will be making minimum wage for the rest of yourt life. Nonsense! Tell that to Bill Gates, Larry Ellson, Michael Dell, Paul Allen or any of a long list of college drop-outs. By the way the above mentioned are all billionaires. When they do those surveys purporting to show that college graduates make more money over the course of their lifetimes than those without a college degree, you can bet your booty they are not including the likes of the above named gentlemen in their survey! Warren Buffet, the second wealthiest American after Bill Gates only went to college and obtained a degree at his parents' insistence. His degree contributed nothing to his career in investing which he started in high school and continued after college. The fact of the matter is that four out of the five wealthiest Americans are college drop-outs!
There is also the possibility of obtaining micro loans. These loans have been set up to provide Third World people access to capital so they can start their own small businesses. Now they're starting to be available for low income Americans as well. This is from Arianna Huffington's recent book Third World America:
Providing credit to small businesses is an innovation for which Muhammad Yunus won the Nobel Prize in 2006. In 2008, Yunus's Grameen Bank opened a branch in New York. In 2010 it opened a branch in Omaha, Nebraska. The Grameen Bank's slogan: "Banking for the unbanked." Hoping to serve one million American entrepreneurs, Grameen America plans to expand into more than fifty cities across the country, including Washington, DC and San Francisco. A practice most closely associated with helping struggling Third World countries has now arrived in America. By February, 2010, the New York branch had extended loans to 2,500 clients, mostly women. The average loan amount is $1,500 (no collateral necessary) and more than 99 percent of the recipients make their payments on time. [Ed. note: this is more than can be said for student loans!]
Grameen Bank is not the only organization committed to providing microcredit to small businesses here at home. Since 1991, ACCION USA has lent over $119 million, in the form of more than 19,500 small-business loans, to low- and moderate-income entrepreneurs. Luis Zapeda Alvarez, for example, who was once homeless and out of work, now runs his own business delivering baked goods to New York City restaurants and delis - in large part due to the assistance he received. After banks refused to lend him start-up capital, Alvarez approached ACCION and borrowed enough money to buy the delivery truck he needed to get his business off the ground. ...
Another New Yorker, Kyn Genet Recitas, opened Neighborhood Holistic, a yoga studio and spa, in Harlem with the help of a microloan from ACCION USA. Within a year the studio was profitable, and Recitas expanded her venture, bringing on twelve part-time employees and providing yoga scholarships for low-income community members.
So you see there really is more than one way to skin a cat! Don't expect Bank of America or JP Morgan Chase to provide you with a business loan! They would be more than happy to provide you with a student loan, however. I leave it to the reader to figure out why. Hint: it has something to do with profit. But read some of the horror stories associated with student loans. If you feel the need for a college diploma and many people do for irrational reasons in my opinion involving incipient inferiority complexes, I would recommend that you also diversify your skills by learning a trade on the side. Or starting a side business. Don't put all your eggs in one basket! You don't need a college education to become "educated." Reading one book a month will probably make you a better educated person than the majority of college graduates. Don't put yourself in the position where you have to be a supplicant to corporate America for a job, and that's all you can do. Diversify! You want to be in the position (even if you never do) to tell your boss "Take this job and shove it." And I challenge you to get through college without taking one cent in student loans!
