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“What is college? Stop going until we figure it out.” -John Mulaney
This quote accurately summarizes my opinion. If you don’t know why you’re going to college, you probably shouldn’t go. In this same segment, Mulaney jokes about his decision to study English for a mere $120,000 (roughly $235,000 in 2026). What did he get in return for this hefty cost? According to Mulaney, not much.
Over the last few years, college enrollment has dropped significantly. According to Clearinghouse, enrollment in traditional 4-year universities has declined, while enrollment in community colleges and trade programs has increased by leaps and bounds. Because discussions about college often serve as useful exercises in cost recognition and economic thinking, I think this topic fits nicely into The Layman’s Tax blog. It appears that in 2026, more young people have heeded Mulaney’s advice to stop going in an attempt to figure out if college is “worth it.”
Is an English degree worth $235,000? What about $120,000? We can say that something is “worth it” when the benefits are more valuable than the costs. Conversely, something is “not worth it” when the costs outweigh the benefits. We could wax philosophically about the value of higher education or the practical value of having a degree in the 2020s job market. These dimensions of the college issue are uninteresting to me. Value is relative, so the benefits of college will be different for everyone. The most practical way to understand if college is “worth it” is to recognize what the costs are.
Explicit Costs
An explicit cost is a monetary amount disclosed up front. What you see is what you pay. A price tag, an obligation outlined in a contract, or the numbers painted on a shop window are all explicit costs.
For college, explicit costs usually include tuition, fees, room and board, and a meal plan. You may also be required to pay an application fee to be considered for admission. These are the non-negotiable costs that get your foot on campus.1 All of these costs add up quickly, and it’s in a school’s purview to increase them as they please. So, even if fees were advertised at a certain amount when you were a freshman, they could be significantly higher by the time you graduate.
Beyond these up-front costs, there are expenses that are necessary to participate in an undergraduate program. These usually include transportation (to and from campus), books, and supplies. When recognizing costs, it’s important to separate anything that you would be paying, whether you were in college or not. If you were planning on moving out after high school, and if dorm costs are equivalent to the rent you would pay in an apartment, then the costs of dorming shouldn’t be considered in your decision.
The cost of a meal plan could be similarly excluded, although plans are usually well above what you could spend to feed yourself. Books and supplies, by contrast, are costs you would only pay if you went to college.
Opportunity Costs
Note the alternative uses. When you spend money on any particular thing, you are forgoing the opportunity to spend that money on something else. To make an informed decision about buying something, you should stop and ask, “What opportunity am I giving up?” Consuming A means not consuming B.
The opportunity cost of going to college exists in both monetary and non-monetary terms. Besides the hundreds of thousands of dollars you could spend somewhere else, the time spent getting a degree is also significant. What opportunities are you sacrificing by going to school for four years? Some people travel, some volunteer, and others go to work right away, get a certificate, an associate’s degree, or a license.
So, instead of asking “Is this degree worth $120,000?” an economically-minded individual will ask: “Is this degree worth $120,000 and giving up other opportunities?”
College as an Investment
When I was seventeen, my parents (both liberal arts majors) encouraged me to look at college as an investment: You will invest your energy, time, and tens of thousands of dollars2 in an educational experience. After four years, what return are you hoping for? Is that return only accomplished by going to college? Is that return only accomplished by going to a specific college? Does the value of the return outweigh the costs?
It’s hard to take the long view of things, especially as a teenager. It’s not impossible, though, so I encourage anyone evaluating college to:
- List the alternatives (going to college versus not, going to school A or B).
- List the explicit costs and the opportunity costs.
- In as much detail as you can, define what return you hope to get from college, and consider if that return can be realized through alternatives.
Hopefully, doing these things will lead to a more informed decision and help you think economically about the true cost of any decisions. The same steps can be applied to other major decisions.
1 Assuming you don’t go to school in your hometown.
2 More money than the average teenager has spent on anything in their life.
