MONEY REALITY · COLLEGE vs TRADE NPV

The Pure Math on College vs Trade School

Most high-school seniors are told college is the only respectable path. The actual math depends on the major, the school, the loan, and the trade. This tool runs both paths to retirement age and shows which one wins, by how much, and under what conditions.

"Both paths are real economic paths. This book treats them with equal seriousness."

College Path

Total cost of degree ($)

Tuition + room + fees + books, minus scholarships. 4 years.

Student loan portion ($)

How much you borrow vs pay out of pocket.

Loan APR (%)

2026 federal undergrad ~6.53%. Private: 7-14%.

Years in school

Standard 4. Engineering / pre-med can be 5-6.

Starting salary after graduation ($)

Median 2025 college grad: ~$60K. Engineering/CS: $75-95K. Liberal arts: $42-55K.

Annual salary growth (%)

3-5% typical for white-collar career path.

Trade / Apprenticeship Path

Total cost of trade certification ($)

Trade school: $5K-$30K depending on program. Many apprenticeships are PAID instead of paid-for.

Loan portion ($)

Often $0 for paid apprenticeships. Trade school may use small federal loans.

Loan APR (%)

Years in training

2 years common for trade school; 4 years for journey-level electrician/plumber apprenticeship (but EARNING while training).

Earnings during training ($/yr avg)

Apprenticeship: $30-45K starting, rising to journey. Trade school: $0 (full time student).

Post-cert salary ($)

Electrician journey: $60-85K. Plumber: $60-80K. HVAC: $55-75K. Welder: $50-75K. CDL truck: $55-85K.

Annual salary growth (%)

3-4% typical. Master/contractor track can grow faster.

Common assumptions

Working years (until retirement)

Standard: 40-45 years from start of career to ~age 65.

Discount rate (%) for NPV

7% real (long-run equity return). Lower if you're risk-averse.

Savings rate (% of net income)

Applied equally to both paths to compare retirement-age net worth.

The 42-year comparison

From the Money Reality series. HS Edition Ch 9 (Career-Path NPV) and First Job Edition Ch 5 (College vs Trade-School NPV) cover this comparison. The Money Reality position: both paths are real economic paths, and the right answer depends on the specific student, the specific trade, and the specific college program. This tool runs the math on YOUR specific case.

Illustrative only. Lifetime earnings vary widely by major, region, employer, individual ability, market timing. Trade earnings vary by union/non-union, urban/rural, journey vs master. Student loan amortization uses standard 10-year. Both paths' lifetime income discounted to present value at the common discount rate. Not financial advice. Does not model: scholarships, GI Bill, military service, employer tuition reimbursement, graduate school, marriage / dual-income, geography premiums.