By Joe Nunes, President, Actuarial Solutions Inc.
November 6 was “take your kid to work day” so I have been thinking about education a little more than usual.
Saving for post-secondary education for our three boys is the top priority for the Nunes family right now. You might think an actuary would be saving for retirement – and we are doing that too – but the immediate focus is on the kids. Adam started Grade 9 this year and Michael and David are right behind him finishing up Grade 8. It doesn’t take a PhD in demography to see the huge hit we having coming from 2017 to 2021… or maybe 2025 depending on how much post-secondary education is needed to get them on their way in life. The only certainty is that I won’t be retiring until school is paid for however long that takes.
When Paula and I met, my mantra was my father’s: “Every child must get at least one university degree.” Over the years I have softened my view for two reasons. First, I don’t think that every kid’s best future follows the university road. Some will be better off at college or developing a trade.
Pushing them down the wrong road is a waste of time and money and is likely to cause a lot of unnecessary strain in relationships. But the bigger question for me today is the question of what value university represents today and how that compares to the cost? (continued.)
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When I went to Waterloo, it cost a few thousand dollars in tuition each year to get a degree which was widely recognized in the actuarial field in Canada. It was a ticket to get into the industry and get started on a career. Today we regularly hear reports of university graduates who are unemployed or are working in a minimum-wage retail or service job waiting for the break in employment that will launch their career. At the same time, the cost of attending university rises and more and more students leave school with a level of debt that is completely disconnected from their job prospects.
At the same time, the internet is changing everything. Khan Academy is one of my favourite educational websites – and it is free! I try to convince my kids that they should spend more time there – but the school system does not seem to promote free online learning that will cannibalize their own product – and it is hard for learning to compete with NHL 14.
So I am wondering, if all types of learning is available for free online, what is the longer-term value proposition that Universities are offering for those students that don’t want to pursue research or a PhD? The large American universities are charging $40,000 plus for a year of school. In Canada we pay much less but it is still a significant cost. I just read that an MBA from Western or Queens is in the $75,000 plus range. Will university prepare them in a way that online learning can’t? Will going to work after high school at McDonald’s and trying to get onto the management track be a better bet than getting a degree in business?
The best answer I can come up with is that there is still a benefit to University in making life-long friends and growing from child to adult. But I am not sure how much I want to pay for my kids to have that privilege. More importantly, I am not sure if there is a better road to getting into a career. We are going to keep saving for university but at the same time I am going to keep asking these questions. (continued.)
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Normally, I am paid to have answers – on this subject I just have questions. I would love to hear your thoughts.
You can read Nunes’ blog on the Actuarial Solutions website by clicking here.
