Case for or against higher education

The next post after this is likely to be an end of the month and end of the first half of the year financial update. It should be an interesting one given how Brexit has shocked the foreign currency and stock markets. Given the number of articles and commentary on the impact of Brexit, I have refrained from writing about it since there is little I can value add on the topic.

Nobody knows what’s going to happen and history will be the best judge of whether this turns out to be the right or wrong decision. In time, I would be able to better assess Brexit’s impact on our asset portfolio but I will continue to stick to our dollar cost averaging investing strategy for now. After all, I would expect the markets to get more volatile and it makes sense not to make any drastic changes to our investing strategy.

Back to the focus of this post regarding my views on higher education. As I have mentioned before, I read the blogs of personal finance bloggers in US and Canada frequently. It’s fascinating to read about the challenges, habits and lives of these personal finance bloggers because although our aims are similar, the problems we face can be very different.

What stood out for me was this issue of crushing student loan debt in US and Canada from the pursuit of higher education. To be honest, it does not appear to be as significant an issue here in Singapore and I reckon it’s due to the government’s attempts to keep higher education affordable for Singaporeans.

Given how Singapore is a small country with no natural resources, developing our human capital via education is a top priority and this has contributed to our economic success. It has never occurred to me before until I read about the student loan debt horror stories in US and Canada that made me realise how the government’s efforts to subsidise higher education and keep it affordable has benefited us.

This got me wondering about the purpose of higher education and the impact of its consumption as a public good. In short, is higher education still relevant in the modern world and has my views on it change after working?

Importance of bachelor’s degree

We have been taught in Singapore since young that it is essential we attend a university and obtain a bachelor’s degree. In fact, our bachelor’s degree should preferably be in an area that has a direct link to an occupation that pays well. As you can see, the focus is less on an area of study that interests you but one that has potential career benefits.

As Singapore is a small and young country, entrepreneurship and self-employment are only just starting to be an acceptable way of life for working adults. It’s still not encouraged because of social norms and an entrenched mindset of a fear of failure. As such, we take a practical approach to higher education and you can see how my wife and I ended up study accounting at university.

An accounting undergraduate degree is one of those degrees that has an average duration in terms of time taken to complete but offers you access to a number of entry level accounting jobs in a variety of industries. It is also less costly than the other “professional” degrees such as engineering, law and medicine.

Although accounting as an area of study is not as interesting as other fields, I have often wondered whether taking the pragmatic approach to higher education has helped us in our careers. We might not be as passionate about our jobs but we enjoy aspects of the work and the above average pay has gotten us a financial headstart.

Would it have been better for us to pursue an area of study and work that we are more passionate about? Then again, what do we know about our passions at such a young age when making such an important decision?

Professional accreditation

When you work in accounting, there is arguably a need to obtain professional accreditations to be promoted to manager level and above. In this case, it’s not as much of a grey area especially when your firm is willing to sponsor the costs of these professional accreditations.

Our professional accounting accreditations were sponsored by our respective firms and the benefits of higher remuneration and career level are more obvious against the minimal costs that were incurred. However, studying while working was one of the most challenging things we have done and it really turned us off higher education. Unless we are being paid to study, is the pursuit of higher education worth it at this stage of our careers?

Relevance of Master’s degree

Because of our experience, our view is that a full-time master’s degree is now of little relevance to our career and personal development. It is a good way to increase your professional and social networks but offers little in terms of career advancement when compared to the costs of study.

Unless we are planning to change careers, a full-time master’s degree is more of an opportunity to take a break from work and experience the life of a student again. It’s less about the pursuit of knowledge but more about having another life experience elsewhere. We don’t expect a full-time master’s degree to change our life but to enhance it now that we will appreciate the experience more.

Ultimately, it’s important to weigh the costs of higher education versus its benefits. It’s not sufficient for you to just study what interests you without considering the payoff because you might end up paying a steep price for your decision.