Hacking Higher Education, Part 1 - CLEP

“There is always The Hacker Ethos

All education - even college education - is fundamentally self-education. The purpose of the Personal MBA has always been to direct you to resources you can use to improve your business skills on your own time, without quitting your job and mortgaging your life.

In the five years I’ve been running the Personal MBA, I’ve seen far too many people give away their power and responsibility to a simple piece of paper by saying something like the following:

“You need a good (read: prestigious/expensive) degree to get a good job."

“No one cares about what you know, they just care about where you went to school."

“No one will interview me without a credential."

Having a credential is not (and has never been) equivalent to being an educated person - education is about what happens in your head, not in a classroom. It is true, however, that many employers use credentials as a screen to weed out candidates for available positions. If you’re committed to self-education but find yourself uncertain about whether or not hiring managers will give you a second look without a degree, this post is for you.

For the moment, let’s ignore the fact that you don’t need a credential to provide value to other people - starting your own business is a much better way to achieve material success than getting a job, and you don’t need a degree to get started. (For proof, read The Millionaire Next Door.) Let’s assume that you’re resigned to going through your career the traditional way by earning a high school diploma/GED, getting a college degree, and interviewing for a job. How should you go about getting your degree?

I have nothing against college education per se - I went to college, and it was a good experience. (I was able to finance my degree completely via scholarships.) What really irks me is that so many people mindlessly assume that sitting in a classroom for 4+ years and racking up tens (or hundreds) of thousands of dollars of debt = getting a useful education, and that it’s always a good investment. It isn’t, and it’s not.

The return on every investment is always directly related to how much the investment costs. The more you spend (in terms of both money and time), the lower your return. College education is one of the most expensive things you’ll ever purchase, so finding ways to get the benefits of a credential without breaking the bank pays off handsomely in both the short and long term.

My goal is not to dissuade you from attending college if that’s what you decide to do. My purpose in writing this is to help you get the best possible educational return on investment by maximizing the value of your credential and minimizing the cost. Never forget that higher education is itself a business, and has a vested interest in maximizing the amount you pay for a credential. The more classes cost and the longer the program takes to complete, the more you’ll pay, particularly if you finance your degree with debt. The more you pay, the more limited your options and the lower your return.

What Does the Optimal Undergraduate Degree Look Like?

Let’s assume you want to maximize the value of getting an undergraduate degree, and that you’re open to options regarding how you actually obtain that degree. Here’s a list of criteria the optimal solution must satisfy:

Highest possible signaling value - since the purpose is to get a job, the more the option makes you stand out as a motivated, intelligent, and reliable employee, the more valuable it is. (Diploma mills are not an option.)

Lowest possible cost - lower costs result in higher ROI.

Lowest possible time investment - less time decreases the opportunity cost of getting the credential and increases the time and energy you can spend doing something else.

Fewest potential barriers - approval processes like admissions and bureaucracy are a significant risk: they can increase both time and monetary costs with little notice or recompense.

These criteria very quickly eliminate traditional college programs as the best option. Most undergraduate collegiate-level programs take a minimum of 4 years of full-time effort to complete, which is a huge opportunity cost.

Programs with low signaling value (community colleges, etc.) tend to cost less, but the perceived lack of distinction undermines the reason you’re getting the degree in the first place. Programs with high signaling value (Ivy League private universities, etc.) cost a huge amount - several hundred thousand dollars, in some cases, which often requires you to mortgage the next 20-30 years of your life by taking on massive amounts of student loan debt.

All programs have huge potential barriers as well: admissions, strict curricula, and bureaucracy, which essentially require you to get someone else’s permission before getting started and increases the risk you’ll have to stay enrolled longer and pay more.

Fortunately, I’ve discovered an option that’s the polar opposite - a low-bureaucracy way to graduate with an accredited undergraduate college degree in 1 year for about $4,000, in a way that will make any potential employer interested in interviewing you.

The DIY College Degree: Testing Out Via CLEP Examination

The College-Level Examination Program (CLEP) is a series of examinations created by the College Board , the same organization that administers the SAT college entrance examinations. There are 34 different CLEP examinations offered, each of which is the equivalent of 3 to 12 college credits. Most accredited universities fully recognize passing scores on CLEP tests as full credit in their program. To graduate with an undergraduate degree, you’ll need to accumulate a minimum of 120 credits.

Official CLEP examination study guides are available for about $20, which includes the material you need to know and sample tests to judge your proficiency before you take the real test. To save money, you can borrow these texts from most public libraries. Each exam is approximately 90 minutes long, and costs $72 dollars to take. If you pass, you get full credit for the equivalent college requirements. If you don’t pass, you can take the exam again - there’s no limit on how many times you can take any given test.

CLEP itself does not offer degrees - once you get to 120 credits, you’ll have to transfer them to an accredited college or university to be awarded a degree. Excelsior College is an accredited institution that does not have a residency requirement, which means that 100% of your credits can be taken via CLEP examination. In order to graduate, you’ll have to pay ~$1,500 to become an Excelsior student and have your credits transferred. Once the transfer is complete, you’ll be awarded an accredited undergraduate degree.

Evaluating the CLEP Approach

The total cost of pursing an undergraduate degree in this fashion is~$4,000. The cost of examinations is approximately $2,500 for 120 credits, plus the $1,500 for transfer to Excelsior. Even if you plan to purchase the CLEP exam books and add some padding if you need to re-take a test, you should spend no more than $5,000 total.

It’s possible to complete this process in less than a year. Assuming you studied full-time, it’s possible to study for and pass a CLEP examination once every two weeks. If you focus on tests that award higher amounts of credit (6/12 vs. 3), you can accumulate 120 credits in less than a year.

Bureaucracy and barriers to entry are extremely low. You don’t have to worry about an admissions process, student affairs offices, course offering schedules, or other bureaucratic issues. All you need to do to get started is to pick up a CLEP prep book at the library, start studying, and schedule the test.

Getting your degree in this way will almost certainly impress most hiring managers. Completing your undergraduate studies in less than a year for $4,000 is a very real achievement that proves your intelligence, ingenuity, drive, and persistence. I don’t know about you, but I would much rather hire a person who got their degree this way than someone who spent a lot of money and time attending a traditional college program, assuming both candidates had the skills to do the job. Graduating in this way also gives you more time to develop economically valuable skills outside of college, giving you a huge edge.

If you’re considering getting an undergraduate degree, it appears that the CLEP option is well worth considering. If you already have an undergraduate degree, this is an excellent case study in the value of doing things differently: there’s always better way, and it pays to find it.

I have more to say about hacking higher education, which will have to wait until the next post. Up next, we’ll discuss a little-known way to obtain a bachelors or masters degree from a world-renowned university for less than the cost of attending a 4-year program at a mediocre state school - without suffering through the dreaded over-the-top admissions process.

Posts in the “Hacking Higher Education" series…