Given Generative AI risks, does it makes sense to pay $300k for a top UG / $200-250k for a top MBA anymore?
Genuine question. I've already graduated and my parents shelled out $300k all-in total cost for me to go to a T20 UG (very fortunate to carry no debt) but I certainly will not go to business school, even for Harvard. Given inflation since then the cost is all in cost (tuition, room & board, spending money) is about $400k.
My question to folks who have graduated from top UGs / MBA programs, if you had to do it all over again but start this program this year (2024-2028) for UG or Business School (2024-2026) would you pay for it?
My sense very, very strongly is that it isn't worth it. I'm actually a little sad here that my parents spent such a stupid sum of money on my college education, with the expectation that it would pay off for decades. I did end up getting a great 6-figure job out of school (I'll just say I graduated in 2nd half of 2010s) but now I really wonder if I'll be able to actually have at least a 30yr career. If I could, it would completely justify the $300k investment. If I can't, then might as well have gone to a lower tier school where maybe the total cost would've been under $100k at most.
This is a tough choice for those thinking of MBA and a brutal choice for those thinking UG (you haven't even started earning and you don't have the ability to generate money in 6 figure range just yet most likely. How do you all shake out on this?
Hi Sequoia, any of these topics helpful:
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You're welcome.
IMO I think AI justifies shelling the money for a good degree.
Back in the day, you literally had to graduate high school, learn a trade (or work for a good company), and you're set. Over the past few decades (and even more-so in the past few years), the wealth gap has widened. We unfortunately live in a world of haves and have-nots- sleepy Joe was right about the K-shaped recovery. My grandparents were blue collar workers (cop, firefighter, etc...) and they were able to buy a house in a nice suburban neighborhood and retire in a beach house. That's not the case anymore. That house that my cop grandpa bought in 1970 is now worth 900k, which means you literally gotta be a doctor or a 250k/yr corporate director to afford that. And generational wealth plays a huge role too, because it allows future generations to fill the gaps between their salary and the crazy cost of living.
So how does this relate to AI? Here's my hypothesis: AI will likely automate the lowest-skill white collar jobs first. Which means things like HR associates, basic accountants, financial advisors, programmers, basically jobs that do a lot of the same stuff over and over again. However, the more educated people will be able to harness AI to improve productivity for their business. So slowly more people will become automated, and the gap between the rich and the poor will widen. The bad coders will get automated by AI, but the smart people who can think will be inventing the AI. The analyst with no brain who can do nothing but enter data in excel will be gone, but the top analysts will leverage AI to their benefit. So to answer your question, this will make it more imperative to upskill and gain more credentials.
That being said, I do think we are a bit away from wso-level jobs (BB-MBB-FAANG-PE) being automated. And I do think this AI thing will take longer than people think to materialize. And it will definitely create new jobs, just like the internet opened a whole new world of innovation.
I had a similar line of thinking before. I agree about the top end of that outcome, and AI will likely continue to increase that social divide. But I also believe that anyone contemplating a graduate degree now will likely be too late to benefit from it. The scenario in which that happens is if AI will “flatten” roles across companies. This article - https://www.bloomberg.com/news/articles/2023-04-24/generative-ai-boosts-worker-productivity-14-new-study-finds#xj4y7vzkg somewhat points to that. In essence, the lower skilled workers reaped the most benefits. So, while there will be a compression of the workforce, it’ll also be harder to stand out. White collar work will become more commoditized than before. The top 5% will probably still benefit, but if you’re looking at a degree now, you won’t be in a position to benefit from that in time.
Thanks for the thoughtful reply. Interesting take above, but the one potential flaw is that while yes, the most talented professionals will be able to multiply their productivity, the vast majority of the college-educated, white collar work force (excl on-site stuff like doctors) is not at this quality tier.
You acknowledge much of this in your post, the nuance I would add is that the college degree is worth it for that top 20% of graduates, but is a horrible value prop for the bottom 80%. So for the avg grad, I'd still lean that college is NOT worth it moving forward in a world of AI
I do think that the world will evolve. New jobs will be made. People thought that the internet would take away jobs, but it has opened up a whole new world. And in an evolving world, education from a top institution can't hurt.
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