Why Millennials Have College All Wrong

Since high school (& college) graduations are happening across the country over the next few weeks, this article would be my message to the graduating class of 2017 (if I was invited to be a speaker). I know several readers of Money Buffalo are taking a different, more cost-effective approach to college for their own children.  

For generations, the typical path for most high school graduates has been to enlist in the military, enter a “hands-on” such as manufacturing and construction, or earning a 4-year degree. As colleges continue to ratchet up tuition prices each year resulting in historic amounts of student loan debt, an increasing number of families are wondering if going to college is truly the best option. Even though a bachelor’s degree might seem like a basic requirement to qualify for any job that pays more than the minimum wage, the traditional college model is broken for most Millennials and they should reconsider their degree options.

Even though a bachelor’s degree might seem like a basic requirement to qualify for any job that pays more than the minimum wage, the traditional college model is broken for most Millennials and they should reconsider their degree options.

The Student Loan Epidemic

Each spring, as the latest crop of college graduates enter the workforce, news outlets publish the latest student loan statistics. Without fail, the average student loan balance grows every year with the most recent graduating class, the Class of 2016, owing to the banks $37,000 before earning their first paychecks. Guess what? The graduating class of 2017 is projected to have an even higher loan balance.

Through a combination of tuition increases as colleges provide more amenities than before, reduced state funding, and an increase in graduate school enrollment, Millennials are arguably the most educated generation in American history and yet they earn 20% less compared to the average income of Baby Boomers in their 20s and 30s. There are more economic forces, in addition to being “overeducated,” that have contributed to the deteriorating value of salaries, but, Millennials need to start thinking outside the box when it comes to earning a college degree.

Related Article: Whatever Happened to Penny Candy? will help explain why $100 is worth less today than 30 years ago

Today’s College Graduates are the Least Entrepreneurial Minded

America has long prided itself on being the Land of Opportunity where anybody can achieve the “American Dream” through a little hard work. High student loan balances, various insurance and self-employment licensing mandates, and the “Great Recession” have all contributed to making Millennials the least entrepreneurial-minded generation currently living. Entrepreneurship isn’t for everybody, but, high student loan payments & living expenses means more college graduates are flocking to the relative security of a steady paycheck from an established employer because it’s simply too expensive and risky to start a business while they are still young and single.

The Majority of College Graduates are Overeducated for the Future Profession

How many college graduates wind up working in the career field they studied for in during college? Try two-thirds, although, the first job of approximately half of college graduates is not related to their major. With approximately 2 million bachelor’s degrees awarded annually, that’s 660,000 graduates each year that essentially went to college to have the diploma hanging on their wall. That statistic might be even higher if it wasn’t for those that attend graduate school to earn a professional degree to make them more competitive in the job market.

A college diploma can still be a “Golden Ticket” but it's more expensive to get (just like the investment price of gold per ounce in recent years).

How Millennials Can Do College Differently

Cost is the only distinguishable difference between the college degree a Millennials earns and their parents’ degree. Political science majors are still reading the works of Plato, Aristotle, and Machiavelli as college students did 40 years ago. Sure, their current events classes might focus more on the Middle East & BRIC economies instead of the Soviet Union economics. While there will always be a need for traditional 4-year colleges, most Millennials can take matters into their own hands when it comes to controlling the cost of college.

Standard thinking is that the only way to save money while earning a degree is to attend a local community college for the first two years, where tuition costs are lower and you can still live at home, before transferring to a 4-year college or by attending an in-state public college instead of a private institution or an out-of-state public college. Thankfully, these aren’t the only ways to earn an affordable and useful college degree.

Technical Schools & Apprenticeships are Great Alternatives

There is a stigma attached to Millennials that do not pursue a traditional 4-year degree. Well, some career paths are better pursued by attending “tech schools” or apprenticeships with on-the-job training that are a fraction of the cost of public college and have a similar earning potential.

Earn a Degree through Credit by Examination

The first two years of college are a near repeat of high school for most students. English Composition, World History, and Statistics are some of the few classes that are required for both high school and college. While the college courses are more in-depth than their high school equivalents there is a lot of redundancy.

Instead, more Millennials should take engage in a process called “credit by examination” by taking CLEP and DSST exams that allow you to “test out” of classes based on what you know already. These tests are popular among the military members and working adults because, for about $100, you take a multiple choice test on a particular subject (i.e. American History or English Literature) and are awarded the equivalent of one or two semesters of college credit if you pass without having to attend a single class!

Several states also offer PSEO options such as dual enrollment courses that earn high school & college credit. Or, you can take advanced placement exams. Speaking from personal experience, I recommend dual enrollment (or similar programs) as most college students are more likely to earn college credit.

This Option is Possible for Anyone!

Credit by examination is an option for anybody whether it’s a high school or homeschool student wanting to take a test at the end of the school year when the material is still fresh or an adult with a full-time job and a young family. It’s even possible to earn an entire, accredited bachelor’s degree solely from these exams for less than $10,000! Traditional colleges might only accept the equivalent of a single semester of exam-earned credit, but, this can still save thousands of dollars!

Credit by Examination is Ideal for Aspiring Entrepreneurs

You won’t hear most colleges talk about this option because it’s unconventional. It does take some self-discipline as you are responsible for studying and taking the necessary exams although you can make a degree plan on the CLEP and DSST websites. But, this a great option for those that are looking to minimize how much time they spend in the classroom and use their hard-earned dollars to launch a side business or buy a house instead of making a monthly student loan payment.

Credit by Examination is Also Great for Traditional Employment

As virtually every traditional corporation requires a bachelor’s degree that previously only required a high school diploma, degrees earned through credit by examination have two potential benefits. In addition to the ability to graduate debt-free, this non-traditional path helps make you unique. Employers are desperate for problem solvers. Earning a degree in an atypical manner is accomplished by thinking “outside the box.”

Is College Obsolete?

A typical college degree doesn’t have the same financial and professional effect it once did because enrollment has swelled at undergraduate and graduate schools. Some professions require advanced schooling to become a doctor, nurse, therapist, or lawyer. Credit by examination is still a possibility for their general electives to reduce tuition costs, but, for everybody else, there are several ways to earning a college degree for the same cost their parents or grandparents might have paid.


Josh founded Money Buffalo in 2015 to help people get out of debt and make smart financial decisions. He is currently a full-time personal finance writer with work featured in Forbes Advisor, Fox Business, and Credible.