Why Does Attending College Involve an Opportunity Cost?

A high school graduation is a significant milestone in many lives, and it often coincides with a young person beginning the final transition into adulthood. In the past, what that meant differed for many people. Today, however, the predominant path involves immediate entrance into college. Many high school students spend their senior years in a chaotic rush of college and scholarship applications, after all. Despite the growing real cost of studying in a university, attendance rates continue to increase. The explanation often goes that earning a degree ostensibly makes one more valuable as an employee, so the tuition, fees, and other associated costs are a justifiable expense.

The cash you part with to pay for higher education is not the only cost, though. There is also something called an “opportunity cost” for attending college. Think about it: how many other opportunities do you close the door on when you choose to continue a formal education? Even so, it may seem worth the trade-off. Why is there an opportunity cost to attending college at all, and is it something that should concern you?

Understanding the meaning of “opportunity cost”

To the answer the “why” of this question, it’s important to comprehend the “what” component as well. When we say that attending college involves an opportunity cost, what does that really mean? This term, rooted in economics theory, is a simple way to describe the potential outcomes you walk away from by choosing to enroll in college and their value. Because we all have a finite amount of time and resources, we need to make careful choices about where we spend those resources.

So, let’s say that you choose to enroll in college and complete a degree in four years. The opportunity cost of attending goes beyond what you must spend on tuition, book fees, housing, and food while attending. It also includes money you miss out on by attending (for example, by taking a job immediately instead) as well as happiness or formative experiences. In other words, what are you sacrificing by choosing to attend college? In some cases, it’s possible that this opportunity cost will be much larger for higher education than for another possible life path. Now, why does college carry with it such a potentially huge opportunity cost?

College education can take a lot of time

The first major reason for this cost is the sheer amount of time one must sink into college education. While a four-year education is the stereotype, the reality is much different: very few freshmen will complete their degrees within eight semesters. Many more students take five or sometimes even six years to wrap up their education — accruing debt all the while. Of course, all this only yields a baccalaureate degree. What if you want to study more intensively in a field that requires a masters or even a Ph. D. to build a successful career path? Now the educational commitment could stretch towards a decade. For the medical professions, it could be more.

The opportunity cost of college in these cases must consider all these years of education. What if you could instead work a job all those years? That’s potentially a substantial amount of income to sacrifice. While this cost won’t be the same for all, it’s critical to think about the amount of time you’ll spend in school.

What if you started building a career now?

Focus on that aspect for a moment. Other options besides college could put you on a career path, albeit a different kind than a college degree could. For example, studying a trade such as welding, carpentry, or electrical wiring can be done at a trade school far faster and for less money than a formal university education. If your interests and passions lie in these areas, then college could carry the enormous opportunity cost of sacrificing a potential career you might love.

Stop and consider how much money you could then make annually without paying a significant portion out to student loans or continuing tuition. Finances are another reason why college carries an opportunity cost with its attendance. Because the college narrative is so dominant today, individuals tend to overlook all the potential alternatives. Of course, these costs aren’t solely tied to the type of job you choose to work.

The intangible costs to the college choice

Every definition of “opportunity cost” includes some reference to lost pleasure and experiences. These are things that are impossible to price; there’s simply no way to ascribe real value to something as important as good mental health and a positive attitude. However, by choosing to attend college, you do trade away some opportunities for these things.

No one gives up the chance to go on vacation for four years when they choose college, but you do take on a substantial burden of stress. There is much to do when attending school for a degree and many pressures. The constraints on your time while in school can also diminish the amount of time you have for recreation. Overall, it’s important to weigh these aspects when you’re making a choice about college as well. Ask yourself what you might do instead if you were to skip the college track and make your way in life through other efforts. Would you be happier than as a student?

Assess your options surrounding college carefully

It’s clear that you’re “paying” more than just tuition when you choose to attend college. Given the circumstances, a university education isn’t always the best proposition for some. For example, a skilled tradesman in a more rural state likely has a better chance of securing a stable, well-paying job than someone with a college liberal arts degree. The loss of time and the ability to enjoy oneself is also worth considering. Ultimately, it’s important to weigh both the real and the opportunity costs of these decisions for the future.

Sources:

1.  http://www.seethruedu.com/the-opportunity-costs-of-higher-education/
2.  https://home.wlu.edu/~smitkam/101/education/Education_analysis.html
3.  http://www.forbes.com/sites/thecollegebubble/2014/05/21/do-the-math-how-opportunity-costs-multiply-tuition/

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