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Some say bypassing a higher education is smarter than paying for a degree

Georgetown's estimated expenses for incoming freshmen is $56,660 for 2010-11.
Georgetown's estimated expenses for incoming freshmen is $56,660 for 2010-11. (Astrid Riecken - For The Washington Post)

"There's a billion other things you could do with your money," Altucher says. One option: Invest the money you'd spend on tuition in Treasury bills for your child's retirement. According to Altucher, $200,000 earning 5 percent a year over 50 years would amount to $2.8 million.

Few families have that kind of money lying around. But if you can give your child $10,000 or so to start his own business, Altucher says, your child will reap practical lessons never taught in a classroom. Later, when he's more mature and focused, college might be more meaningful.

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The hefty price tag of a college degree has some experts worried that its benefits are fading.

"I think it makes less sense for more families than it did five years ago," says Richard Vedder, an economics professor at Ohio University who has been studying education issues. "It's become more and more problematic about whether people should be going to college."

That applies not just to astronomically priced private schools but to state schools as well, where tuitions have spiked. Student loans can postpone the pain of paying, but they come due when many young adults are at their most financially vulnerable, and default rates are high. Even community colleges, while helping some to keep costs down, prompt many to take out loans -- which can land them in severe credit trouble.

According to a report in the Chronicle of Higher Education, 31 percent of loans made to community college students are in default. (The same report found that 25 percent of all government student loans default.) Default on a student loan and face dire consequences, beyond a bad credit record -- which can tarnish hopes of getting a car, an apartment or even a job: Uncle Sam can claim your tax refunds and wages.

Now, take a key argument in favor of getting a four-year degree, the one that says on average, those with one earn more than those without it. Education Department numbers support this: In 2008, the median annual earnings of young adults with bachelor's degrees was $46,000; it was $30,000 for those with high school diplomas or equivalencies. This means that, for those with a bachelor's degree, the middle range of earnings was about 53 percent more than for those holding only a high school diploma.

But a lot of college graduates fall outside the middle range -- and many stand to make considerably less.

"If you major in accounting or engineering, you're pretty likely to get a return on your investment," Vedder says. "If you're majoring in anthropology or social work or education, the rate on return is going to be a good deal lower, on average.

"I've talked to some of my own students who've graduated and who are working in grocery stores or Wal-Mart," he says. "The fellow who cut my tree down had a master's degree and was an honors grad."

The unemployment rate among those with bachelor's degrees is at an all-time high. In 1970, when the overall unemployment rate was 4.9 percent, unemployment among college graduates was negligible, at 1.2 percent, Vedder says, citing figures from the Bureau of Labor Statistics. But this year, with the national rate of unemployment at 9.6 percent, unemployment for college graduates has risen to 4.9 percent -- more than half the rate of the general population. The bonus for those with degrees is "less pronounced than it used to be," Vedder says.

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