The Sunk Cost Fallacy and How I Volunteered for Indentured Servitude

From March 13, 2018

Webster’s Dictionary defines the Sunk Cost Fallacy as the misconception that you’re making rational [monetary] decisions based on the future value of objects, investments and experiences when in truth, your decisions are tainted by the emotional investments you’ve already put in, and the more you invest in something the harder it becomes to abandon it.

Actually, that’s not Webster’s Dictionary, that was just the first Google result. But it sums up the idea pretty well, and it’s how I feel about graduate school.


Higher Education has become a pyramid scheme: universities recruit prospective students with the promise of more opportunities, and a brighter future, and then the student must become a salesperson for their own program lest their degree lose its value. All that most universities really care about is increasing enrollment to keep their Ponzi schemes alive. That’s why, according to the National Center for Education Statistics, between 2000 and 2015, total undergraduate enrollment in degree-granting postsecondary institutions increased by 30 percent. And much like the snake oil, sold by old-timey swindlers or the dietary supplements sold by Vemma Nutrition, my graduate program has made many promises on which they’ve failed to deliver.

Time and time again, I’ll hear from the faculty, “You get out of the program, what you put into it.” Well guess what, I’ve put in over $40,000, so I expect to get out at least a new model, mid-sized sedan’s worth of education. More and more I feel like I’m being sold a degree and not an education. But that’s backwards, it’s the education that has the value, not the degree. And if I am being sold a degree, then I’m a customer and my university has terrible customer service. Excuse me sir, I’d like to return this education; it’s under-cooked.
What is this shit
Now here’s the real Catch 22; I have 6 credits remaining to graduate at a cost of over $7,000. I know these 6 credits are over-inflated and not worth nearly $7,000. I knew this $20,000 ago. But I’m acting under the Sunk Cost Fallacy, thinking that if I can finish my degree I can get a good job with a high enough salary to pay off these student loans. But, if I were to follow logic and reason, and not continue to pay for an education that I know is vastly overpriced then I would have to begin paying back my loans immediately, degreeless.

It’s a real pickle I’ve gotten myself into. According to “The Economic Value of College Majors,” a 2015 study by Georgetown University, college graduates with a bachelor’s degree earn an average annual salary of $61,000 over the course of their career, while those with a graduate degree earn $78,000 annually.

Assuming I’m average, that puts my monthly take home at $6000 before taxes as opposed to the $4700 I’d take home without a masters degree (my parents paid for my bachelors degree (thanks mom, thanks dad)). Now according to Student Loan Hero, if I were to choose a 10 year plan at a fixed 6% interest rate, that comes to a monthly payment of $522, leaving me with a take home of just under $5500.

That’s still better than $4700, right? True. But whereas before I was debt-less and free to do whatever I wanted, now I’m stuck with that $522 monthly payment no matter what, hence my indentured servitude. I feel trapped, and the worst part about it is, I did this to myself. I thought I was making the right decision. I signed up for this. I volunteered.

The bottom line here is, education is a business folks. Whether it’s a public institution or not, they’re out to make money. Universities see the easy money out there from federal student aid packages, and they have raised their tuition accordingly. Over the last 20 years, the average in-state tuition has increased a whooping 237%, far outpacing the rate of inflation. Easy money, and over-inflated products is what led to the housing crisis, and it’s happening again in higher education. The question is, what’s going to happen to us little guys when this bubble finally burst?
sorryThanks for reading! If you have any advice let me know in the comments below or contact me on Twitter.

P.S. I plan on adding some illustrations and reposting in the near future. Bye, bye now.

P.P.S. I had a friend point out that I misspelled “Ma’am” in the comic above. To that I’d like to refer him to my post on Learning Disabilities

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