Sitting in class at Northwestern University, Jonathan Hoenig could barely hear his professor’s drone over the sound of the trading floor still ringing in his ears.
Hoenig’s part-time stint at the Chicago Board of Trade had stirred his ambition far more than his communications major or philosophy minor, to the point that he would run out of class to check CNBC and call his brokers from the bathroom.
“My mind was not there,” he said.
With less than a year left before graduation and to the despair of his parents, Hoenig dropped out of college in 1998.
And the diploma he never got can eat his dust.
Now 30 and living in the South Loop, Hoenig manages a hedge fund he says is worth tens of millions of dollars, appears as a financial commentator on Fox News Channel and writes a weekly column for smartmoney.com. A book he wrote in 1999 called “Greed is Good” sports a nod from Forbes Magazine calling Hoenig “the voice of finance for Generation X.”
As Hoenig sees it, a college degree would have been worthless, as “being in the trenches was a lot more valuable than being in the ivory tower of school.”
While that may be true for Hoenig and other entrepreneurs who echoed his sentiments, experts say most students need degrees now more than ever.
With the job market tight and more people going to college, expectations are high and competition is fierce, so a degree helps distinguish job candidates, they say.
“For the vast majority, a college degree is a requirement to move on and up the ladder,” said Jim Conroy, chair of the post-high school counseling department at New Trier High School in Winnetka. In fact, Conroy said, students need to pile internships on top of their degrees to stand out.
But Hoenig says the prevalence of degrees and ballooning tuition costs are strikes against the vaunted diploma, as college students are paying more for a diploma that’s less marketable because everyone’s got one. A degree isn’t necessary, he said, if you have the vision, drive or work ethic to compensate for it and withstand employers’ scrutiny.
“I think that times have changed,” said Hoenig, managing member of Capitalistpig Asset Management. “Ambition, hunger, capability and drive are more important in today’s environment than a degree.”
Though college costs are rising–an average of $65,000 to complete a degree at a four-year school or more than $120,000 at an elite private university, according to the National Center for Education Statistics–the investment pays off in the long run, most experts say.
On average, college grads earn $1.28 million, or 69 percent, more over their lifetime than people who have only a high school diploma, said Kent Hill, a research professor at Arizona State University. That more than makes up for the money they lost while at school, he said.
Exceptions like Hoenig or Bill Gates, who also didn’t finish college, are less common scenarios played out under exceptional circumstances, Hill said. In fact, the gap in average pay between those with a college degree and those without is widening.
“The prospective student does not want to play the lottery,” said Hill, who co-authored a study last year on the value of a college education. “He wants to play the odds.”
Of course, for some people, college is out of reach or too expensive. Those financially or academically ill-prepared for a four-year school are wise to pursue some post-secondary education, such as an associates degree or vocational training, said Harry Holzer, professor of public policy at Georgetown University and a visiting fellow at the Urban Institute.
Having a degree helps signal to employers that an applicant has the analytical and communication skills so important in today’s market, where many lower-skill jobs have been replaced by computers, Holzer said.
“What’s necessary to signal quality keeps going up, and if you don’t have that degree, it’s harder,” Holzer said.
Tom Gimbel, founder and CEO of The LaSalle Network, a downtown Chicago staffing and recruitment firm, said 85 percent of the employers he works with require that applicants have a college degree. Those jobs that don’t usually are office clerk positions that pay $8 an hour.
A degree “shows that the person had the wherewithal to finish college,” said Gimbel, who has placed more than 8,000 people over the eight-year life of his company. “Why give somebody a reason not to hire you?”
That had been a concern for Todd Gabel before he founded Nexum Inc., a Chicago company that provides Internet security solutions to Fortune 500 companies. Gabel, 37, sometimes felt so insecure without a degree that he didn’t apply to certain jobs he had his eye on, like at IBM.
Gabel dropped out of the University of Texas at Austin after a year because his grades were terrible, fulfilling a warning he recalls his 8th-grade teacher giving his mother: “Don’t waste your money on college for this child.”
He was taking classes at the University of Illinois at Chicago and working as a stock boy at a computer store when the entrepreneurial itch took hold. He started selling computers, eventually jumping to corporate sales, and became such a good salesman he decided to break out on his own.
With his street smarts and ability to read people, Gabel said, he found over time that he “didn’t need that damn degree.”
“Having a degree would have done nothing,” said Gabel, now boss to 30 employees at his four-year-old company. “If I didn’t drop out of school, I would never have had this business. I don’t know what I’d be.”
Restaurant owner Kevin Boehm never doubted what he’d be, and it became clear early on that he didn’t need college to get there.
“Some of the first advice I ever got was to drop out of college and go to a culinary school,” said Boehm, 35, co-owner of Chicago restaurants BOKA and Landmark.
A political science major, Boehm dropped out of the University of Illinois at Urbana-Champaign after his sophomore year and started working at restaurants. Boehm treated that time like his college education, getting the practical experience respected in the industry, he said.
But people who try to make it without school have to have a plan, Boehm said, and not hope that opportunities will fall out of the air.
“Lots of people get out there, and the tendency is to enjoy too much of your own party,” Boehm said. “I would work double shifts, and I had my eye on the prize.”
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aelejalderuiz@tribune.com
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Famous dropouts
Plenty of famous faces reached stardom without college degrees, suggesting that with enough talent, ideas or gumption, anything can happen. Here are a few of the most notable dropouts.
— Alexia Elejalde-Ruiz, RedEye
Ben Affleck
actor
College: Dropped out of the University of Vermont after one semester to move to L.A.
Success: Won an academy award for “Good Will Hunting.”
Paul Allen
co-founder of Microsoft
College: Dropped out of Washington State University after two years to start Microsoft.
Success: Worth about $22.7 billion, he is the sixth richest person in the world this year, according to Forbes.
Cindy Crawford
supermodel
College: Dropped out of Northwestern University, where she had a scholarship to study chemical engineering, in her first semester to pursue modeling.
Success: Was named highest-paid model in the world by Forbes in 1995.
Ellen DeGeneres
comedian
College: Dropped out of the University of New Orleans after one semester.
Success: Won eight Emmys for two of her TV shows, “Ellen” and the “Ellen DeGeneres Show.”
Michael Dell
founder of Dell
College: Dropped out of University of Texas at Austin when he was 19 to start his company.
Success: Worth about $17.1 billion, he is the 12th richest person in the world this year, according to Forbes.
Bill Gates
co-founder and chairman of Microsoft Corporation
College: Dropped out of Harvard during his third year to start Microsoft.
Success: With a net worth of $50 billion, he has been named the richest person in the world for 12 years by Forbes Magazine.
Tom Hanks
movie actor
College: After attending junior college, dropped out of Sacramento State University in his third year to pursue acting.
Success: Won two academy awards and is considered one of Hollywood’s most bankable stars.
Steven Spielberg
movie director
College: Dropped out of California State University, Long Beach, when he was 22. He finished his degree 35 years later via independent projects.
Success: He has won four academy awards. He had estimated earnings of $332 million from June 2005 to June 2006, according to Forbes.
Steve Jobs
co-founder and CEO of Apple
College: Dropped out of Reed College in Portland, Ore., after one semester.
Success: Worth about $4.4 billion, according to Forbes.
Madonna
performer
College: Dropped out of the University of Michigan after two years to pursue a dance career in New York.
Success: Was named most successful female recording artist of all time by the Guinness Book of World Records. Won five Grammys.
Gwyneth Paltrow
actress
College: Dropped out of the University of California, Santa Barbara, to pursue acting.
Success: Received an Academy Award for best actress.
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The rising cost of college
The cost and popularity of college has risen dramatically over the past 25 years, and the gap in pay between those who have a college degree and those who don’t has widened. Here’s how things have changed over the years, according to the National Center for Education Statistics.
— Alexia Elejalde-Ruiz, RedEye
Total fall enrollment in degree-granting institutions
1980 12 million
1990 13.8 million
2000 15.3 million
2004 17.3 million
Percent of high school graduates enrolled in college within a year of graduation
1980 49.3
1990 60.1
2000 63.3
2004 66.7
Average annual undergraduate tuition, room and board for four-year colleges
1980 $3,499
1990 $7,602
2000 $12,922
2004 $16,465
Median annual earnings for full-time male workers age 25 to 34 with only a high school diploma
1980 $38,800
1990 $32,000
2000 $32,300
2004 $30,400
Median annual earnings for full-time male workers age 25 to 34 with a bachelor’s degree or higher
1980 $46,300
1990 $46,000
2000 $50,900
2004 $50,700
Median annual earnings for full-time female workers age 25 to 34 with only a high school diploma
1980 $25,500
1990 $23,700
2000 $23,500
2004 $24,000
Median annual earnings for full-time female workers age 25 to 34 with a bachelor’s degree or higher
1980 $34,100
1990 $38,800
2000 $39,900
2004 $40,300
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RITA REDEYE
Do you think a college degree is necessary to be successful? Tell us at ritaredeye@tribune.com. Please include your full name, age and neighborhood.
