Evaluate the ROI on Education

[JAG]

I've been engaged in the nuances of another topic on inflation and tariffs. Within it, a few of us struggle to avoid commenting on a minor but related factor involving the cost of education in fear of getting dinged by the 'stay-on-topic Gestapo'.

Lately, the resurging interest in trade school is ruffling the feathers of my bougie community and several others in the country. Somehow, many kids quietly falsely create an assumption that they are entitled to the 'college experience'. My son had it, so his mom and I had to unpack it and shake him up. College is a privilege and a great opportunity for far fewer people than the masses who currently go to college.

A host of careers offer robust career opportunities without getting saddled with college debt. It's not just 'trade school', but advanced trade school models are mixing competitive academics with real-world, on-the-job training of a specialized vocation. Disciplines include mechatronics, welding, aviation mechanics, cybersecurity, construction management, … This emerging new model is not common; only about 30 schools like it exist in our country.

I’m aware of it since one like it was recently built in our county. It’s a public trade school built with zero state funding, county tax dollars, and 50% of funds from private investors, counting on them to provide their labor force.

New high school grads from trade schools earn a starting average pay of $67,000 and are college-ready if it interests them. Depending on the selected field/trade, future salary increases can be very attractive.

The following figures reflect the ratio of the average starting salary to the average cost of education. The cost of room and board is rendered as 'free' for High School, but factored into the cost for college. Interest costs were not included in the cost for education if a loan was taken out:

Avg Salary / Trade School Tuition+Room & Board (free since it assumes kids are at 'home' and that cost is the same when they go off to college).
$67,000 / free

Average Salary for all Undergrad / In State Public Tuition+Room & Board
$57,000 /$156,000

If held in isolation, some may conclude I'm pushing the idea that college is dumb and trade school is the way. Context matters; these numbers are averages based on the first year of work. They do not apply to my oldest three kids currently in college, US Coast Guard, & trade school.

 

[brymoore]

The studies still show that lifetime earnings of college educated individuals far exceed non-college individuals. There are always exceptions to the rule - meaning bad college degrees are worthless and there are trade people making great money. Going to an expensive school and getting a history degree. A state school degree isn’t expensive. I sent two kids to state school. Annual cost is ~ $10k. A lot of the charts assume Ivy League type cost degrees.

In general, college pays more depending on the degree. I would argue the growth in salary is greater with college degrees over a earning lifetime. If there are trades making over $100k, it’s not many. Only 17% of households, which could be two salaries, make above $100k.

 

[npaden]

Some of the trade school costs are pretty expensive. Welding, Diesel Mechanic, etc. For sure not "free". Agree that the $156,000 for 4 years of college at a state school is high. Around here you could go to a 2 year associates type college for a very reasonable cost that tracks directly with the larger state universities and I think you could get that done for close to knocking the $100,000 off that number. Again, if you are just looking at cost you can't throw out room and board on one and include it on the other. Either way they have to have somewhere to eat and sleep. Make them go to a school close to home, it's not a vacation.

Some of the overlooked high earning jobs are in the medical field other than Drs. and nurses. Think "technicians". These usually take a 2 year training certification and can make pretty good money.

With that said, I think you can do really well in the trades and I think you can do really well with a college degree. You can do poorly with both as well.

 

[TOGIE]

i'm definitely to a degree ignorant on this nuance and it may not always (or even) exist, but often i assume that those higher starting salaries often come at a cost of some benefits that come fairly standard in your traditional post college "white collar" jobs, no?

 

[Fire_9]

In general, college pays more depending on the degree. I would argue the growth in salary is greater with college degrees over a earning lifetime. If there are trades making over $100k, it’s not many. Only 17% of households, which could be two salaries, make above $100k.

View attachment 365842

I have a feeling you haven't spent much time around the trades. I know quite a few people that were making $100k/yr while the people they graduated high school with were still earning their degrees. I can walk into most companies and make as much or more than some engineers already on the payroll. Yeah the salaried folks get some perks, but the trades are definitely worth a look

 

[Fire_9]

Some of the overlooked high earning jobs are in the medical field other than Drs. and nurses. Think "technicians". These usually take a 2 year training certification and can make pretty good money.

With that said, I think you can do really well in the trades and I think you can do really well with a college degree. You can do poorly with both as well.

Technicians in the utility/industrial space make damn good money too. $150-200k/yr is achievable....

 

[brymoore]

I have a feeling you haven't spent much time around the trades. I know quite a few people that were making $100k/yr while the people they graduated high school with were still earning their degrees. I can walk into most companies and make as much or more than some engineers already on the payroll. Yeah the salaried folks get some perks, but the trades are definitely worth a look

I grew up blue collar. I have spent time around the trades and have friends who are electricians and HVAC technicians. My best friend drives a very sophisticated massive bulldozer for land development around various states.

The numbers don’t support the claims about trades being better than college unless the reports are stale. The last report I can find is dated 2023. Everyone’s knows a trade guy making “big money”. I’m saying they are exceptions to the rule. Most people joining trades aren’t going to make the exceptional salary. The three guys I listed above all went in apprentice type programs, licensing, for some, years of work experience to get the higher salaries.

 

[SAJ-99]

free since it assumes kids are at 'home' and that cost is the same when they go off to college).

Why are you assuming it is free?
Can you name the school? I found Drake State in Alabama but quickly saw it wasn't as clean in the funding as the school you described. This looks more like a pretty standard college.

Drake State awarded $1.5 million Strengthening Community Colleges grant by U.S. Department of Labor - Drake State Community & Technical College

Drake State Community and Technical College has been awarded a $1,514,520 grant as part of the U.S. Department of Labor’s latest round of Strengthening Community Colleges Training Grants. Drake State […]

drakestate.edu

 

[Fire_9]

I grew up around a lot of heavy industrial/production jobsites so maybe my perspective is skewed as those types or jobs typically pay more than your average residential stuff. The money is out there if a guy knows where to look and I do not feel like I've been held back monetarily due to my trade school certificate. I had money in the bank, a pension, and $50k in a 401k while my high school classmates were still accruing debt in college

Now the flipside of this is that I currently hate working for corporate America. If I had an engineering degree I could work for a small firm somewhere and not have to deal with the BS that I do, but I don't think I'd be making any more money. College isn't for everyone and neither is a trade school. The truth of it all is that a person can make a very comfortable living whichever way they go

 

[TheTone]

One thing a degree can do though is open career paths for you a trade school or blue collar work doesn’t. My brother makes near the same salary I do; he has no post high school education while I have a bachelors. If I applied at his company I’d probably immediately be considered for a management position based on education while he wouldn’t get an interview for any job with my company. I would say my job satisfaction is multiple levels higher than his is. Additionally I’ll be retired for over a decade before he is even thinking about it. Not everything related to education and the job market is as simple as salaries.

 

[Gellar]

I think there is no clear path for everyone. There are pros and cons to each. I think we require a college degree for a lot of jobs that could be learned from on the job experience. It’s rare during my day to day job that I think, man I’m glad I took a class on that in college, but it’s almost daily that I think back to on the job experiences to shape how I respond to a task or situation.

 

[BigHornRam]

Gloom and doom on CNN.

https://www.cnn.com/2025/03/26/economy/student-loan-debt-ny-fed/index.html

 

[jpc01101]

I am discouraging my kids from going to college. I think unless you go for engineering, to be a nurse or doctor or similar it is a bad investment given the current outrageous cost associated with a degree! That being said my oldest kid went to college. She did her last two years of high school at a resident program at a local university so got 2 years free, the got full scholarship for the remainder of undergrad and graduated with a masters degree in 3 years total at age 21 and ended up costing her (from her college fund) around $30k. That was the cost for 1 year masters in applied bioengineering at the UW in Seattle. After all that she wanted to live near home and took a job paying less than a nurse makes. If you fancy small town living there is no path with the upside of a 2 year nursing degree.

 

[WesternCO68]

I won't discourage my kiddos from college, but I will make sure they know that affordability needs to be priority number one. A college degree can open doors that will be shut to you without one. There's no arguing with that. If my kids want to pursue a trade, that's great too. But college has definitely helped me go where I wanted to go, and I don't want to deny that to my kids.

 

[jpc01101]

But college has definitely helped me go where I wanted to go, and I don't want to deny that to my kids.

Same for me, it helped me get my foot in the door. I work in tech (Cyber Security specifically) and the past few years we have completely stopped looking at degrees. Simply not required anymore in tech.

 

[brymoore]

Gloom and doom on CNN.

https://www.cnn.com/2025/03/26/economy/student-loan-debt-ny-fed/index.html

15.6% delinquency is huge!

I wonder how much of the delinquency is from the perception that Biden was going to eventually end all student loan debt.

The future of student loans is in question too. The program may be ended by the Trump administration. Banks haven’t provided student loans since Obama federalized the program. Unless government guarantees are provided to banks, as previously, only select students with parent guarantees are going to get student loans.

 

[Jamen]

Degree, no degree, trade school, 4-year school. Hard work and determination will outweigh that. If a person wants to make something of themselves, they will. Now back to the OP i think there is good with both. We need both in our society and trying to say one is better than the other would be a personal choice IMO.

 

[JAG]

Why are you assuming it is free?
Can you name the school? I found Drake State in Alabama but quickly saw it wasn't as clean in the funding as the school you described. This looks more like a pretty standard college.

Drake State awarded $1.5 million Strengthening Community Colleges grant by U.S. Department of Labor - Drake State Community & Technical College

Drake State Community and Technical College has been awarded a $1,514,520 grant as part of the U.S. Department of Labor’s latest round of Strengthening Community Colleges Training Grants. Drake State […]

drakestate.edu

Ah, gotcha- trade school in high school while the student is at home.

 

[SAJ-99]

Ah, gotcha- trade school in high school while the student is at home.

That was how I first interpreted the description and just assumed I was wrong. Having some standard for education in this country has been a huge benefit, even if given the increasing trend in "stupid". I think the requirements in english, social studies, math and science need to remain. If the electives are all in "electrical wiring", seems ok. But a kid committing to a lifelong career at 15 and 16yo seems like a stretch. Other threads have talked about adding requirements in financial education or computers, which seem reasonable. I don't know how this trade school idea isn't just more school, like Community college - that I am in favor of.

 

[JAG]

The studies still show that lifetime earnings of college educated individuals far exceed non-college individuals. There are always exceptions to the rule - meaning bad college degrees are worthless and there are trade people making great money. Going to an expensive school and getting a history degree. A state school degree isn’t expensive. I sent two kids to state school. Annual cost is ~ $10k. A lot of the charts assume Ivy League type cost degrees.

In general, college pays more depending on the degree. I would argue the growth in salary is greater with college degrees over a earning lifetime. If there are trades making over $100k, it’s not many. Only 17% of households, which could be two salaries, make above $100k.

View attachment 365842

Solid post, especially since you acknowledge key caveats- Ivy League school costs, choice of major, etc.

Other caveats are the majors that typically don't reap a financial benefit but end up with a high than average income.