In this module we’re going to talk about college. And I want to frame this the way we frame everything in this course: as a financial decision. Because other than buying a home, going to college is likely the single biggest financial commitment most people will ever make.

The average cost of a four-year public university is now over a hundred thousand dollars in total. Private universities can easily exceed three hundred thousand. And yet most people make this decision at seventeen or eighteen years old, with almost no financial education, based largely on emotion, prestige, and peer pressure. That’s a recipe for a very expensive mistake.

That being said, a college education can be one of the highest-return investments you’ll ever make—if you do it right. But there’s a huge difference between doing it right and doing it the way most people do it. And there’s one piece of misinformation I hear constantly that really bothers me: “Take out student loans, go to an expensive private college, and worry about the costs later.” That is some of the worst financial advice a young person can receive.

The College Barbell — Which Schools Actually Have Value?

There are roughly five thousand colleges and universities in the United States. And I’m going to say something that might be controversial: many of them have poor value propositions. The tuition is high, the outcomes are mediocre, and the debt students take on to attend them does not pay off.

The way I think about it is what I call the college barbell. On one end, you have top-twenty-ranked national universities. Schools like the Ivies, Stanford, MIT, Duke—institutions with brand names that open doors, powerful alumni networks, and strong career placement. If you can get into one of these schools, the investment often makes sense even at a high sticker price, because the return on investment in terms of career opportunities and earning potential is very high.

On the other end of the barbell, you have low-cost state and city universities. Schools like the CUNY and SUNY systems in New York, or their equivalents in your state. The average tuition at an in-state public university is about seventy-three percent less than the average sticker price at a private institution. That’s a massive difference. And many of these schools offer excellent educations, strong local networks, and a path to a good career without burying you in debt.

Then there’s the middle. And this is where I think a lot of families get into trouble. Private colleges that charge two hundred, two hundred and fifty, three hundred thousand dollars for a four-year degree but don’t have the brand recognition, the alumni network, or the career placement to justify that price. You’re paying top-tier tuition for a degree that the job market treats as average. And in many cases, you’re borrowing to do it.

The exception in that middle is if you’re getting a substantial scholarship or grant that brings the cost way down. If a mid-tier school is offering you a full ride or close to it, that changes the math entirely. But if you’re paying full price? You need to think very carefully about whether the return on that investment justifies the cost.

Trade Schools and Alternative Paths

Now before we go any further into how to pay for college, I want to make a really important point. College is not the only path to a successful career. And for a lot of people, it’s not even the best path.

Trade schools and vocational programs offer highly specialized training in fields like electrical work, plumbing, HVAC, welding, healthcare technology, and skilled manufacturing. These programs are typically two years or less. They cost a fraction of what a four-year degree costs. And they lead directly to jobs that are in extremely high demand and pay well.

A plumber in Texas right now, where they are building data centers, makes well over six figures. These professionals have no student debt. They started earning years earlier than their peers who went to four-year colleges. And the demand for their skills is not going away. You can’t outsource a plumber. You can’t automate an electrician.

In fact, that brings up something worth thinking about. When you’re choosing what to study, consider automation. You turn on the news today and all you can hear about is how a significant percentage of jobs that exist today will be fundamentally changed or eliminated by automation and AI in the coming decades. But skilled trades that require physical presence, problem solving, and hands-on work are among the most resistant to automation.

There is a cultural bias in this country that says a four-year college degree is the only respectable path to a good life. That bias is costing young people hundreds of thousands of dollars in unnecessary debt and years of lost earning potential. If you’re naturally crafty and if you want to start earning and building wealth sooner rather than later, a trade school might be the better financial decision for you.

Student Loans — Understand What You’re Signing Up for

If you do go to college, the question of how to pay for it is critical. And for millions of families, the answer involves student loans. So let’s talk about what you’re actually signing up for.

There are two main types of student loans: federal and private. They work very differently and it’s important to understand the distinction.

Federal student loans are issued by the government. They don’t require a co-signer or good credit. They offer flexible repayment options and can be forgiven in some situations. Payments typically aren’t due until after you graduate. And they come in two forms: subsidized, where the government pays the interest while you’re in school, and unsubsidized, where interest accrues from day one. The annual limits range from about fifty-five hundred to twelve thousand five hundred dollars depending on your year in school. You access them the Free Application for Federal Student Aid or FAFSA.

Private student loans are issued by banks and private lenders. They mostly require a co-signer and a good credit score. They often require payments while you’re still in school. They don’t offer the same forgiveness programs or flexible repayment options. And their interest rates can be higher and variable.

If you’re going to borrow, federal loans should always come first. Exhaust your federal options before even considering private loans. Private loans should be a last resort.

But here’s the bigger question, and it’s one I really want you to sit with: should you be borrowing at all? The answer depends on two things. First, what are you studying? And second, what is the realistic earning potential of that degree?

If you’re borrowing a hundred thousand dollars to get a degree in a field where the average starting salary is thirty-five thousand dollars, the math simply doesn’t work. You will be paying off that debt for decades, and compounding will be working against you the entire time.

On the other hand, if you’re borrowing a reasonable amount—say forty or fifty thousand in federal loans—to get a degree in engineering, computer science, nursing, accounting, or another field with strong and demonstrable earning potential, that can be a sound investment. The return on investment justifies the borrowing.

The key is to be honest with yourself before you sign those loan documents. What is the realistic career outcome of this degree at this school? What will I earn? How long will it take me to pay back what I borrow? If you can’t answer those questions clearly, you’re not ready to take on the debt.

How to Pay for College the Smart Way

Before you borrow a single dollar, you should explore every other option available to you. And there are more options than most people realize.

Start with the FAFSA. Every student should fill out the FAFSA regardless of family income. It’s the gateway to federal grants, federal loans, work-study programs, and many state-level aid programs.

Next, look at merit-based scholarships. Many schools offer significant tuition discounts based on academic performance, test scores, and extracurricular achievements. This is where applying to a range of schools can pay off. A school that ranks slightly lower might offer you a half-tuition or full-tuition scholarship that makes it the smarter financial choice, even if it wasn’t your “dream school.”

Then there are external scholarships, and there are more of them than you might think. Programs like the Gates Scholarship, which targets high-achieving students from specific backgrounds. HEOP, the Higher Education Opportunity Program, which serves educationally and economically disadvantaged students in New York State. The Posse Foundation, which identifies students with extraordinary leadership potential. These are just a few examples. Every state has its own programs. Research what’s available where you live, because there is money out there that goes unclaimed every year simply because people don’t know to apply for it.

And if you started a 529 plan early—which we covered earlier—that’s money that’s been growing tax-free specifically for this moment. The families who planned ahead have a massive advantage here.

The bottom line is this: exhaust grants and scholarships first. Then use 529 savings. Then federal loans if necessary. Private loans should be the absolute last option, and ideally, you avoid them entirely.

Choosing the Right School — What Actually Matters

If you’ve decided that a four-year college is the right path, choosing the right school is critical. And I think most people focus on the wrong things.

Here’s what actually matters financially.

Cost—what is the real, net cost after financial aid, grants, and scholarships? Not the sticker price. The net price.

Academic program—does this school have a strong program in your intended field of study? A school’s overall ranking means less than the strength of the specific department you’ll be in.

Outcomes—what are the graduation rates? What are the career placement rates? What do graduates actually earn? This data exists. Look it up before you commit.

Connect with current students and alumni. Ask them what the experience is really like. Ask about internship and job placement support. Ask about the career services office.

And here’s what to avoid. Don’t rush the process. This is a multi-year, six-figure decision. Give it the time it deserves. Don’t be a follower—don’t go somewhere just because your friends are going. Don’t fall for the legacy lure or the die-hard fan effect, where you pick a school because your parents went there or because you love their football team. Don’t obsess over location at the expense of value. And don’t rely solely on reputation. A school’s brand name does not guarantee your success. What you do while you’re there matters far more.

What to Major in — Think About the Future

Your choice of major has an enormous impact on your financial future. And I think it deserves far more analytical thought than most students give it.

You should think about the fields that are well positioned for the future. Fields that are heavily routine-based and don’t require creative problem solving or human interaction are more vulnerable to automation.

I’m not saying you should only study things that are immediately practical. A liberal arts education can teach you to think critically and communicate clearly, and those are valuable skills. But you need to go in with your eyes open about the earning potential and career paths that different degrees lead to, especially if you’re borrowing money to fund that education.

The combination of an expensive degree and a low-earning field is one of the most damaging financial decisions a young person can make.

Career *skills* Nobody Teaches you

Now I want to shift gears and talk about something that I think is just as important as choosing the right school and the right major. These are the practical career skills that nobody teaches you in school but everybody expects you to have when you enter the workforce.

First: your resume. You should have a working resume by your sophomore year of college at the latest. It doesn’t need to be perfect. It needs to exist. A clean, one-page resume with your education, any work experience including part-time and summer jobs, relevant skills, and extracurricular activities. No fancy graphics. No colors. Clean and professional. Update it every semester as you gain new experiences.

Second: business communication. Learning how to write a professional email is a skill that will serve you for your entire career. Keep it brief. Use a clear subject line. Address the person properly. State your purpose in the first two sentences. Proofread before you send. It sounds simple but you would be amazed at how many people get this wrong, and first impressions matter.

Third: how you present yourself. The way you dress and carry yourself in professional settings matters. I’m not saying you need to wear a suit every day. But you should understand the spectrum from casual to business casual to business professional to business formal, and know what’s appropriate for different situations. When in doubt, dress more formally than you think you need to. It’s always better to be overdressed than underdressed.

Fourth: social media. Your social media accounts need to be private, or they need to be clean enough that you’d be comfortable with a future employer scrolling through them. Because they will. Companies routinely check candidates’ social media before making hiring decisions. One inappropriate post can cost you an opportunity. It happens every day.

Key Takeaways

So let’s summarize with a few key takeaways.

Number one: treat the college decision like the major financial decision it is. Do not pick a school based on emotion, peer pressure, or prestige alone. Look at the cost, the outcomes, and the return on investment.

Number two: think in terms of the barbell. A top-twenty school or a low-cost state university are both strong value propositions. The expensive middle—high tuition, average outcomes—is where families get into trouble. The exception is if you’re getting a substantial scholarship.

Number three: take trade schools and alternative paths seriously. Skilled trades pay well, have strong demand, are resistant to automation, and come with little or no debt. For many people, this is the smartest financial move.

Number four: if you’re going to borrow, be honest about the ROI. What does the degree cost? What will you realistically earn? Does the math work? If it doesn’t, don’t borrow. Exhaust grants, scholarships, and 529 savings before taking on any loans. Federal loans before private. Private loans as an absolute last resort.

Number five: fill out the FAFSA. Every student, regardless of family income. Research external scholarships in your state. Programs like the Gates Scholarship, HEOP, and the Posse Foundation are just a few examples. There is money out there that goes unclaimed every year.

Number six: choose your major with your eyes open. Consider what the job market will look like in ten and twenty years. Consider automation. Make sure the earning potential of your field justifies the cost of the degree.

And number seven: start building your professional toolkit now. Have a resume by sophomore year. Learn to write a professional email. Understand how to dress for different settings. And keep your social media clean.

The Bottom Line

College can be one of the best investments you ever make. It can also be one of the worst. The difference comes down to whether you made the decision with a spreadsheet or a feeling.

The same principles that run through this entire course apply here. Understand the true cost. Understand the incentives of the people advising you—colleges want your tuition dollars, lenders want your interest payments. Think about opportunity cost. Think about compounding—every dollar of unnecessary debt is compounding against you from the day you borrow it.

And remember: there is no single right path. A top university, a state school, a trade program—any of these can lead to a great life. The key is making the choice intentionally, with full information, and without borrowing more than the investment can return.

This is the second biggest financial decision most people will make. Treat it that way.