Discussion Topic

An opportunity cost is simply a choice between two possible options where you judge the benefits of one choice over the other. 

A lot of people when taking into account the financial implications of going to college only consider the debt they accrue while attending college; room and board, books, fees, tuition, etc.  They often don’t consider one of the biggest financial factors in the whole equation, which is the cost of giving up four years of income to attend college. Four years of income will often add up to more than the total cost of tuition and all the related expenses. Four years income is a big chunk of money.

Let’s use a typical US student as an example since we all know how insane education costs are over there, we have two students who are graduating high school. One decides that he will go straight to the work force and the other decides to go to a four-year college.  The student who chose to go to college will pay, or more likely owe, $71,440 when starting his or her career. But not only that, they will also be out an additional $120,000 in lost income. The $120,000 sounds like a lot but it is really pretty conservative, just take $30,000 a year multiplied by four years.  So college for that student came at a $191,440 cost of opportunity. At 22 years old after graduating college that student is down $191,440; let that sink in for a minute.

Now we move on to our student who chose to go straight to work after high school. Let’s say he or she chose to become an auto mechanic. The average salary for that job is $36,180. Multiply that by four years and at 22 years old that student is in the positive $144,720. That is a difference of $336,160 between the two. That’s a lot of money!

In conclusion, based on the above example, should it apply to me, the opportunity cost of going to college is the money you would have earned if you worked instead. On the one hand, you lose four years of salary while getting your degree; on the other hand, you hope to earn...