The Total Cost of an IT Education
BackBy Shawn Conaway — December 2008
Information technology is one of the fastest-growing industries. And with fast growth comes a greater demand for jobs. Employment of computer and information systems managers is expected to grow 16 percent between 2006 and 2016 — faster than average for all occupations — according to projections by the Bureau of Labor and Statistics’ (BLS) “Occupational Outlook Handbook, 2008-09 Edition.” Network systems analysts, data communications analysts and computer software engineers are particularly in demand.
But while a healthy industry is great, aspiring IT professionals still must develop their technical chops in order to take advantage of it. There are many ways to do this, but the most common can be lumped into several categories: full-time college, part-time college, technical classes and boot camps. Of course, a combination of some or all of these is ideal, as the Holy Grail of marketability is to have a degree, significant work experience and a few meaningful certifications.
The Full-Time Experience
The percentage of people opting for a post-secondary education has been growing gradually for the past century. It was not uncommon for someone from “The Greatest Generation” — generally billed to be those born between 1901 and 1924 — to drop out of high school to continue working on the family farm.
The emphasis on education is completely different now. The increase in college attendance rates is indicative of the country’s swing away from primary reliance on agricultural and manufacturing jobs to white-collar service jobs such as IT. Today’s student realizes not only that going to school is a way to better your life, but also that not holding a degree is a barrier to employment. One IT recruiting firm indicated that education can play a big difference in hiring, indicating that even candidates boasting more than 20 years of experience but no degree can get frustrated looking for work.
That said, a full-time education has its challenges. One of the most significant hurdles is the fact that a student is not earning an income while getting an education. The College Board’s annual “Trends in College Pricing” report says many students in both public and private four-year colleges take more than four years to complete their degrees.
A full-time student also has to consider that he or she is not developing any work experience while in school. After graduation, likely in five to six years, he or she still will have to take an entry-level job. On the plus side, a full-time student usually has more time to explore other interests and develop a well-rounded resume.
Part Time Plays a Role
College isn’t just for recent high school graduates. Many people decide to return to school for a degree after being in the workforce for a while. But it’s a difficult balancing act between competing responsibilities for work, family, self-improvement and enjoying life. These competing forces can make it impractical or impossible to go back to school full time. As a result, the returning student often chooses to go back to school part time.
The “Trends in College Pricing” report states that the average cost of tuition in a public four-year college for in-state students is $6,185; for out-of-state students it’s $16,640. For a part-time student, the cost of tuition would be slightly more than half the regular cost.
Yet, going to school part time in many ways is preferable to full time because tuition often is subsidized by an employer. The National Center of Educational Statistics claims that the average employer contributes about $3,000 toward tuition, although employers can contribute $5,250 tax-free through 2010, according to an AssociatedContent.com article.
Taking advantage of tuition reimbursement benefits an employee who is driven enough to seek the skills the employer needs while making himself more marketable, almost guaranteeing a pay increase.
“As the job market tightens and so many candidates are competing for the same jobs, it’s your education that can separate you from the rest,” said Jennifer Wolf, manager of staffing at Fiserv, a technology solutions provider. “If your career goal includes a management position, it’ll be a necessity. After all, it’s no coincidence that employers offer tuition reimbursement. They want you to have that degree.”
Of course, part-time education isn’t without its challenges. For one, it takes much longer to complete the degree, leaving significantly less free time available. The minimum credit load for most four-year degrees is 60 credits, with each credit taking roughly three hours of study time per week. However, some might feel that the loss of free time is offset by not losing any income, and students benefit from extra perks such as discounts on laptops and software.
Signing Up for Technical Classes
College is not for everyone. On top of which, going back to school might not be worth your time if you are happy in your current position and moving up to management gives you the heebie-jeebies.
Some students rely on cost-benefit analyses to help decide if college is worth the effort. These analyses are useful not only in illuminating how much school costs, but also in deciphering the average amount of time a pay increase takes to break even with the cost of education.
However, these kinds of analyses rarely account for the soft costs, such as the time lost to studying that could have been used to do other things, such as taking your child to a baseball game, going on a vacation or cultivating a friendship. It also misses the intangible perks such as respect from your peers and flexibility with career options.
If college isn’t in the cards for you, ad-hoc, weeklong technical training classes may be the solution. Technical classes are the most common type of continuing education in IT. One of the primary benefits of technical classes is that the cost of training typically is borne by the employer. Plus, classes usually occur during work hours, so you don’t have to use your personal time to complete the training.
A one-week class generally runs about $3,000. Classes taught by staff instructors cost less, while those taught by a contract trainer tend to cost a little more. For instance, Inacom Information Systems in Madison, Wis., charges $2,250 for five days of Windows Server 2003 Active Directory training with staff instructors. A week of learning how to install and configure VMware Infrastructure 3.5 with a contract trainer costs $3,195.
Then there are the certification exams. Tests commonly cost in the $100 to $300 range. Most Microsoft tests cost $125, while a VMware Certified Professional exam costs $175.
The major drawback of technical training classes is the training usually meets the needs of the business, not necessarily a student’s personal training goals. For example, if you’re aspiring to be a Microsoft Exchange Server administrator, training for a new rollout could be very useful — but not if you’re hoping to become a storage area network administrator.
In these situations, an employee will have to be motivated to cough up enough money and vacation time to get desired training. Even when training needs match up, the employee may have to spend his or her own money for a certification exam. The good news is, if the student passes, many Fortune 100 companies, companies with a large IT staff and consulting companies often offer reimbursement for the cost of the exam.
However, some businesses, especially smaller ones, may be less interested in paying for certification tests if the certification brings value only to the employee. The business owner also might be concerned the employee will ask for more money once he or she is certified.
Kickin’ It in Boot Camp
Boot camps may appeal to someone who is exploring different IT career paths, since there is a small time investment and little time away from work. They offer the same value as standard technical training but in a compressed time frame. A standard technical training class is eight hours long; boot camps focus on immersion and often run 12 hours per day. They are generally held at hotels since the training day is so long.
Boot camps have a premium of $50-$200 per day for food, lodging and test vouchers. Airfare is not included in the cost, which often makes justifying a boot camp session harder than standard local training.
The real worth of an IT education isn’t just the cost of the education alone, but rather the cost of not getting one. Education is expensive, but no education is even more expensive.
According to the U.S. Census Bureau, the average salary for a high school graduate in 2007 was $26,894. The median salary for someone with a bachelor’s degree was nearly 75 percent more, at $46,805.
Geddy Lee from the rock band Rush drove the point home in his lyrics to the song “Freewill:” “If you choose not to decide, you still have made a choice.” Choosing to not decide on a bachelor’s degree can equate to an average lifetime loss of hundreds of thousands of dollars — or more.
Now that the baseline is established, we can delve into the cost of actually getting an education. The primary education costs can be summarized as follows: lost potential income while in school; tuition and student loans; the cost of books; and room and board.
Let’s first examine the potential income a student might forgo while in school. The College Board compared salaries of people who went straight into the workforce after high school with those who decided to temporarily forgo a salary for an education. Those who chose to go for a two-year associate’s degree recouped their education investment along with their lost income in nine years. Bachelor’s degree holders earned back the investment in education and lost income in 14 years.
Now let’s turn our attention to tuition. As noted earlier, the “Trends in College Pricing” report found that 2007-08 tuition for an in-state student at a four-year public institution was $6,185, a 6.6 increase from the previous year. Meanwhile, tuition at a public two-year college increased 4.2 percent over the same time period, to $2,266.
Any tuition cost, increasing or not, is likely to become student loan debt. For example, according to a report commissioned by the California Research Bureau, the average debt of graduating seniors in California public four-year colleges was $17,200 in 2006, and nearly half of the graduates were in debt.
The good news is that financing an education just got less expensive. On July 1, 2008, the interest rate for Stafford Loans for undergraduate students dropped from 6.8 to 6 percent, with the promise of a 5.6 percent rate for the 2009-2010 year, 4.5 percent the following year and 3.4 percent from 2011 to 2012. The rate will return to 6.8 percent for the 2012-2013 year. The maximums also jumped $2,000 for an undergraduate lifetime limit of $57,500.
When it comes to room and board, it seems both pillows and pizza cost about the same at two-year and four-year colleges. Room and board for a two-year college is $6,875 while the four-year equivalent is $7,419. The cost of books and supplies also shows the same minor variation. The annual cost of books and supplies at a public two-year college is $921, versus $988 at a public four-year college.
Looking to the Future
Choosing between formal college education and ad-hoc technical training is a highly personal choice, and it depends heavily on preferences and extenuating circumstances. But there is a clear opportunity cost for not getting an education.
Further, different ways of obtaining training don’t have to be mutually exclusive. After all, a combination will yield the most well-rounded results, and while it might be a hassle now, education pays off in the long run with a better salary, a better retirement and better benefits.
Shawn Conaway, VCP, MCSE, CCA, is president of NaSPA and editor of Virtualize! magazine. He can be reached at email@example.com.