 Why are college degrees, especially the ones in the United States, so expensive? And why is it that the average person will spend around $80,000 on a college education and go almost $40,000 in debt? And why is it that that debt will take them on average 15 to 20 years to pay off? In this video, we're going to be going over just those questions. The main reasons why college degrees are so expensive here in the US and what you can do about it. And by the way, guys, links to my college 101 course down in the description just finished it. It took me months of hard work to get this thing done. I'm very proud of the results. And basically what it's going to teach you is how to get the most out of college with the least amount of effort, how to get your first entry level job after graduating, and how to choose your dream college major. It'll only be available at this discounted price for a short amount of time. And I'm not saying that. So definitely check that out down in the description if you basically want all of your college related issues solved in one product. Don't let these colleges take advantage of you. And also, if you haven't done it already, gently boot the like button in order to defeat the evil YouTube algorithm. You know, I don't have a million dollar budget to spend on, you know, marketing like a lot of these colleges do. And so I rely on you liking and sharing the content in order to get my message out. So with that being said, let's jump right into it and talk about the first reason that college degrees are so expensive here in the United States. And that is that people think of college as the golden ticket to success. Now, I've gone over this in detail in other videos on my channel about basically whether college is worth it, right? Is a college degree worth it? And the short answer to that is most of the time on average. Yes, a college degree is going to be worth it. However, this is just an average. And when you look into the details more closely, you'll see that there are certain college degrees that are propping up a bunch of them that are at the bottom, right? So there are certain college degrees that are definitely worth it when it comes to, you know, how much you're putting in versus how much you're getting out. Whereas there's other college degrees where it's very questionable. And then some are just straight up not worth it. Now, I think where this belief comes from is if you go back maybe 20 or 30 years, you could pretty much get any college degree and you're going to be good to go. All businesses wanted to see is that you had a college degree and then they were going to hire you, even if it was for a pretty unrelated job. And over time it morphed into a situation where a college degree was almost seen as part of the American dream. So you basically needed a college degree in order to be successful. Now, realistically speaking, 80% of millionaires, 90% of billionaires and 95% of Fortune 500 CEOs do have a college degree. But you have to ask yourself the question. Is it just correlation or is it causation? Right? So did them getting a college degree help them become millionaires, billionaires, Fortune 500 CEOs? Or was it kind of the other way? Maybe it was that they were just very smart and driven in the first place. And because they're so smart and driven, they were able to get a college degree and achieve all those amazing things. And the truth probably lies somewhere in the middle. But that's not the point of this video. The point here is because of the fact that people thought college degree was a golden ticket to success, they wanted to make it accessible to everybody, whether you were a rich person or a poor person. Now that on its face sounds like a very good thing. And, you know, coming from somebody who was dirt poor, came from a very poor background, I appreciate the fact that they wanted to do this for me. However, the way they're running it and incentivizing it is not the best way. There's other countries that do this in a much more intelligent way. And that's why their college degrees don't cost nearly as much. Because of the way they've structured this, what has ended up happening is college is basically just a blank check for universities to write just about any number that they want. And that's why the cost of college has gone up faster than any other type of service. And it's probably somewhere between three and four times more expensive than it should be. And that's the second point on this list, which is the cost of college is essentially just a blank check for universities. So because of the way it's structured, costs have continued to go up. And that's why we have gotten into this situation where we've got $1.8 trillion in student loan debt. And the average person is going around $40,000 in debt in order to get their education. So because of the way that this is structured, if you're not careful, this can actually hurt you, especially if you come from a lower or middle class background, more than it helps you. And that brings me to the third point, which is there's pretty much no vetting process. And by that, I mean there's no process where in just about any other type of loan, they make sure they look at your background, your credit history, et cetera, before they give you the loan, right? So let's say you're trying to get a car loan or a mortgage loan, a loan for a house. They are going to look at a bunch of different factors before they give you a loan and an interest rate on that loan. The way that college student loans work with FASFA is they pretty much just give loans to anybody who needs them. And this is very similar to what they were doing with mortgages right before the 2008 financial crisis. They were giving mortgages out to anybody without really looking at their financial history. Everyone was getting approved and we all saw what that led to. Now, at first, this whole idea of not really having a vetting process was probably a good thing just because the cost of college wasn't very high. But over time, because of the previous point, the whole blank check thing, the cost of college has gotten higher and higher. And now this whole vetting process is becoming a big problem. And this is why it is taking people on average about 20 years to pay off their student loans. And the big thing I want you to think about here is there's pretty much no consequences to these universities, right? So if you graduate from a university with an art history degree, you aren't able to get a job and you're not able to pay off your student loans, the university suffers zero consequence. They have no skin in the game here and you have to deal with the results. And so because of the way this system is set up, this basically incentivizes universities to tell you, hey, get an art history degree, go after your passions, even though there's absolutely pretty much no prospects of you getting a job. And this brings me to point number four, which is college is no longer about getting an education. That's only a very small amount. So this is in several different ways. First of all, the professors that are gonna be teaching you in college, a lot of the time, especially at the bigger universities, are researchers first. So their primary job is to do research and get grants and teachers second. So that's just like a little side thing that they do. So these professors, which you are paying ridiculous amounts of money to see their lectures and to go in and ask them questions and to learn from them, you aren't even their primary goal, right? Their big thing that they're doing is research. Now I've broken this down in other videos about where all of that money is going and you can check those other videos out, but basically a significant amount of money, more money than is going to your actual education is going to things like rock climbing, right? Building rock climbing walls and doing research and the college's marketing department and building football stadiums, et cetera, et cetera, et cetera. And then the rest of your tuition is going into these schools endowment fund, which is basically just a fancy word for a hedge fund, right? So a very small amount of your tuition is going towards paying for your actual education. And this is why other countries are able to give people really good educations at a fraction of the cost. Now, you might argue that an education here in the US is better than an education in other places. And it's really hard to argue against that or for that, honestly, nobody really knows, but I can tell you that it's probably not twice as good, three times as good or four times as good, that's for sure. Now, on top of the student loan debt itself, this brings me to my next point, which is student loan debt interest is much worse than you probably think it is. Now, when you see the amount of student loan interest that you have to pay on the debt that you take out, which by the way right now is fluctuating, but usually it's about four to 5%, let's just say 5% interest. So let's say you take out $100,000 in student loans, that means you have to pay 5% interest on that $100,000 every single year. But this is a type of debt that is guaranteed by the federal government. What that basically means is you cannot get out of it. So let's say you started a business, for instance, and you took out $100,000 in debt at 5% interest and the business failed, you can declare bankruptcy and you don't have to pay that back. Now, it's a really messy process, but you have that option. With student loan debt, if you declare bankruptcy, you still have the student loan debt, 99.9% of the time. And it's even worse for grad school debt, right? So if you take out what's known as grad plus loans, usually it's gonna be more like 7% interest and they have even less protections than the undergraduate variety. And this is why people who become doctors or dentists or lawyers, et cetera, they might take out $200,000 in student loans, but they end up paying $500,000 by the time it's fully paid off. And thinking about this from a different perspective, think about how attractive it is that you cannot default on these loans from the perspective of a loan shark on Wall Street. They absolutely love student debt and that's why there is an entire industry around servicing student loan debt and they make so much money. Now, after you've gotten all this debt, let's say you go $40,000 in debt and let's just say it's 5% per year and so obviously you're gonna have to start paying that off. The next biggest issue that I see is people get degrees that don't teach you employable skills. If you are someone that is gonna go to college and you're from like a poor or maybe a middle class background like I was, you wanna make sure that you learn employable skills. And the reason for this is because you need to get a return on your investment. You're spending four years of your time and you're going $40,000 in debt. You need to make sure that you can pay that off. Right, so just to give you an example here, getting an engineering degree, on average you'll be able to pay that off around five times faster than someone who gets a psychology degree. So this is just an example, but you know with an engineering degree, maybe you're able to pay off all of that debt in four years versus someone who gets a psychology degree might take 20 years. So this is something that you just need to think about. You know, I wish it wasn't this way, but unfortunately getting a college degree is no longer just a golden ticket to success. And you do have to think about it in terms of return on investment. Now the next thing, this is number seven, which is grad school is basically like an upsell. So if you've studied business at all, a lot of the time businesses will have a main product and then other products that are upsells. And sometimes the upsells make more money than the normal product. And this is becoming more and more true when it comes to student loans. And the reason for this is because grad school is much more expensive and the student loan debt has much worse interest rates. So it's usually around 7%. Now again, this is on average, you may be able to get a stipend or some type of grant in order to attend grad school for free. And that would change things of course, but if you're not able to, grad school is much, much more expensive. So on average, PhDs are $108,000 in debt. Masters are around 66,000 in debt and professional doctorates are around 186,000. So professional doctorates would be something like a medical doctor, lawyer, et cetera. And so unfortunately, I'm not saying all universities are like this, but it makes sense from a business perspective for them to get you to go back to school. And so if you were to get an undergraduate degree that pays for itself, where it's a good return on investment, you might be like, you know what? I don't wanna go back to school. I don't wanna get a master's or a doctorate. However, if you get an undergraduate degree where your job prospects are horrible and you find that out, you're very likely to go back to school, get a master's or a doctorate in order to give yourself better chances. And this is what happens to people over and over again. I've seen this so many times throughout my life. Sometimes people will leave comments down below getting really angry at me telling me, you know, getting a PhD is a great thing. And guess what? Hey, I'm not saying it's not a great thing for certain people, but I think there's a lot of people who are getting into it that have no idea what they're doing to themselves. And I've seen this happen over and over again. People falling into this trap of getting an undergraduate degree where they can't get a job and they're pretty much forced to get a graduate level degree, which sometimes it helps them get a job. Sometimes it doesn't, but it almost always is going to end up with them in even more debt. And I make these videos in order to help you to not end up in this circumstance, okay? I'm not doing this to hurt your feelings or anything like that. And I'm also not saying I'm right about everything. If you think I'm wrong about certain things, comment down below. I'm very open-minded. But like I said, these colleges have millions of dollars to spend on marketing and I'm just one guy who makes videos. So if you want to get the word out about this, go ahead, share the video, like it. And if you haven't done it already, subscribe to the channel. Other than that, check out my other videos right here because I made them just for you.