A Moment of Clarity Amid Complexity
The inspiration behind Personal Finance Reimagined (PFR) came from a fundamental yet persistent challenge: why do people struggle to make the best financial decisions, even when they want to? Most people genuinely want to make the right choices, especially with high-stakes financial decisions, but the complexity of the system and an overwhelming amount of data often lead to missteps. Nowhere is this more evident than in higher education—one of the biggest financial commitments a person can make, yet one of the most complex to evaluate. With no clear way to measure the return on an education investment, the need for better decision-making tools became obvious. That’s where PFR began.
This article walks through PFR's origin story. We share how we started with college decision-making and used it as a launching pad to help with ALL personal finance decisions.
About the Author: Jeff Hulett leads Personal Finance Reimagined, a decision-making and financial education platform. He teaches personal finance at James Madison University and provides personal finance seminars. Check out his book -- Making Choices, Making Money: Your Guide to Making Confident Financial Decisions.
Jeff is a career banker, data scientist, behavioral economist, and choice architect. Jeff has held banking and consulting leadership roles at Wells Fargo, Citibank, KPMG, and IBM.
I recall a defining moment when I read The Wall Street Journal article, Calculating the Risk of College, at the beginning of the pandemic. Let's step back in time. Colleges were scrambling to shift courses online, and it exposed the fragility of higher education's delivery model. Many professors embraced change, but some passively resisted. The common refrain—"I have tenure and I did not sign up to deliver classes differently"—was both revealing and frustrating. Visionaries like Sal Khan, founder of Khan Academy, were already working to change the education delivery model. To better align it with how people actually learn and their economic reality. It was evident that higher education wasn't merely costly; its operating framework fosters structural rigidities that might result in a disconnect from student outcomes.
At the same time, my team and I were building PFR, refining our mission as we navigated the world’s transition from data scarcity to data abundance. We understood that making decisions in a world overflowing with information was fundamentally unlike any other time in history. The challenge has quickly transitioned from our evolutionary urge to gather more data, which remained essential until very recently. Our society has swiftly transformed into a data-rich environment, outpacing our evolutionary development. In our data abundant culture, success is defined by subtracting data, curating what remains, and applying a consistent, repeatable decision-making process to achieve financial success. For PFR, this started with college ROI. Determining college ROI -- an acronym which means college 'Return On Investment' -- is all about ensuring college is an investment for your future - rather than merely relying on the averages presented by the government.
The bottom line is - conventional personal finance education teaches facts about financial products. Those are "old world" habits of data scarcity. In today's data abundant world, those facts are easily available with a Gen AI prompt or Google search. It is what we do with those facts in the context of our decision process that is the new personal finance challenge. PFR is exceptionally equipped to assist individuals in addressing that challenge.
Challenging the “College Pays” Narrative
The WSJ article claimed that "college pays off for most people ..." Something about that conclusion felt off. My quant-trained instincts were screaming at me, begging me to dig deeper. The problem? Their analysis only focused on the returns based on education level - such as average salary or unemployment rate. But to understand ROI, one needs to know both risk and return. The unanswered questions were for those that start college, 'How many were left behind?' and 'What is the nature of their risks?' This was my starting point.
My experience in data science, bank risk management, and loan decision systems taught me that static pool analysis is the proper approach. This method tracks a group from the moment they apply their decision agency—such as a high school senior choosing college—and measures all outcomes over time. Yet, neither the Bureau of Labor Statistics (BLS) nor other major research institutions followed this preferred method. Instead, they structured their data to show a rosy picture of college outcomes, failing to account for the risks of starting but not finishing with the desired outcome. Did they not structure the data properly because they did not know how? Or did they structure the data in a way that confirms a desired outcome - like "College Pays?" I am not sure of their motivations - but we knew we were on to something!
The True Risk of College: “Life Impairments”
With the help of researchers, I reconstructed the available data to conduct a true static pool analysis. The good news is, almost all the data was already available, it just needed to be rearranged to align with the student's decision agency and risk understanding. The findings were revealing and shocking. If you graduated from college with no debt and started a job based on your college degree—congratulations, you have the golden ticket. However, you are in the VAST MINORITY. Instead of a world where college is a sure path to wealth, we found that only 9% of students who start college experience the “ideal” outcome suggested by the BLS "Education Pays" cultural standard.
Outcomes for College Starters:
Life Impairments | % starting college... | Outcome | ROI potential |
0 | 9% | Graduate, no debt, job requiring a degree. | High |
1 | 22% | Graduate, job requiring a degree, but with student debt. | Marginal but possible |
1-2 | 51% | Either did not graduate or are underemployed. | Unlikely |
2-3 | 8% | Graduated but defaulted on student loans. | Very Unlikely |
3+ | 10% | Did not graduate and defaulted on student loans. | Bankruptcy will not even help |
Static pool analysis results based on data from The Wall Street Journal, National Center for Education Statistics, The Institute for College Access & Success, Federal Reserve Bank of New York, Strada Institute for the Future of Work, Bureau of Labor Statistics.
We defined “life impairments” as specific obstacles hindering financial stability and long-term success. Each impairment—such as student loan debt, underemployment, failure to graduate, or loan default—represents a distinct financial burden. However, these impairments do not act independently; they layer on top of each other and create an amplified risk layering effect, a principle well-known in risk management. The more impairments an individual accumulates, the more they dynamically interact, increasing the probability of an undesired financial outcome. As impairments increase, individuals encounter escalating disadvantages, significantly hindering their ability to attain a positive college ROI and accumulate long-term wealth.
So, does college pay? Only for a small portion of those that enter college. Our static pool analysis shows for those who graduate and secure a job that requires a degree, a positive college ROI is possible, though debt levels can significantly impact wealth accumulation. However, for the approximately 70% of students who either do not graduate, default, or end up underemployed, a negative college ROI is almost certain. The financial burden of student loan payments, particularly the $400/month average, often reduces retirement savings by an estimated $3.5 million, making long-term wealth-building far more challenging. The picture painted by the BLS was not just incomplete—it overlooked the substantial risks faced by the majority of college entrants.
"Compound interest is the eighth wonder of the world."
- Albert Einstein
Another important but imperfectly understood reality is a) how compound interest works and b) how college debt counters compound interest, amplifying the risk layering effect. Remember, student loan debt is a fixed monthly payment that gets paid instead of making retirement account contributions available to the marvelous effects of compound interest. This $3.5 million for retirement is possible for those that START YOUNG - like in their 20s or early 30s - with saving and investing. College debt impairs people's ability to save and invest exactly when the time value of money math suggests they should start. Financially, college debt is a double whammy.
A student outcome-focused college appreciates PFR
You may ask, "Wow Jeff, this is quite a mission and focus on college ROI. Since you are a college professor, isn't this a little like biting the hand that feeds you?!"
My response—"Not at all! In fact, I focus on high ROI colleges like state universities, private colleges with ample need-based scholarships, and the community college system. The PFR approach is perfectly suited for those more affordable options, ensuring that students get the education they need without the overwhelming financial burden."
"Our hunt is to provide new college students and their families with conviction in their confidence about their college decision. What college wouldn't like that!"
Deconstructing the Policy Failures: Public Choice Theory & Hidden Costs
Public choice theory explains one of the biggest barriers to reforming the student loan system—the idea that policymakers and bureaucracies respond to the loudest, most organized voices. The “in-the-door” population (high school seniors, parents, and education industry cheerleaders) actively advocate for college access and financial aid, while the “regrettable-exit-door” population (those burdened by debt and underemployment) remains silent, fragmented, and politically invisible.
This asymmetry in political pressure keeps bad policies in place.
Universities benefit from unlimited federal loan backing and use spending as a proxy for quality, fueling cost inflation.
The government student loan program administrator (The Department of Education or DoE) and private loan servicers prioritize program consistency over student outcomes.
Student Loan Asset-Backed Securities (SLABs) with government credit guarantees keep bond markets invested in the system, shielding it from market corrections.
Shhhhhhhh ... if you are very quiet, you can hear yet another person defaulting on their student debt or feeling overwhelmed by a lack of job opportunities and a crushing debt load...
Unlike the mortgage crisis of 2008-09, which resulted in industry reforms, the student loan system has no market correction mechanism. Colleges continue to raise prices because federal aid guarantees a steady stream of funding from those borrowers.
Real-World Case Studies: The Hidden Burden of Debt
Consider two high school graduates, Sarah and Mike. Both contemplated attending college simultaneously, with the BLS's "Education Pays" promise echoing in their minds. So they decided to take the plunge. Let us now see how things turned out:
A normal person... | Their Story... | Life Impairments |
Sarah | ...graduates with $40,000 in debt, lands a $50,000/year job, and pays $400/month in student loans. She defers homeownership and retirement contributions, missing out on wealth accumulation. | 1-2 |
Mike | ...drops out after two years with $25,000 in debt, struggles with underemployment, and eventually defaults. His credit is wrecked, and his job mobility is severely limited. | 3+ |
Sarah’s case is common—while she is “successful” based on the BLS "Education Pays" narrative, her long-term financial trajectory is stunted. The compound interest math tells us 55% of the 40-year working life investment valuation occurs in the first 8 years.* Meanwhile, Mike represents the almost 10% who default without a degree and face even harsher consequences. Unlike entrepreneurs taking business risk, Mike cannot even declare bankruptcy to help manage his education risk.
How PFR Helps Students Achieve Positive College ROI
PFR empowers high school students and their families by providing a structured decision process that clarifies their college criteria and connects these priorities to the best available alternatives. Instead of viewing college as a simple "yes or no" decision, we guide students to ask, "Now or not yet?" By expanding the range of options—including lower-cost alternatives like community colleges, MOOCs, trade schools, work experience, or military service—students can choose paths that maximize ROI while minimizing financial risk. The key is aligning education choices with long-term financial and career goals, ensuring that students make informed, strategic decisions rather than following societal defaults. Our behavioral economics-enabled technology called Definitive Choice is a key enabler. It puts a college ROI-aligned tool in the hands of the students and their families.
Expanding PFR: From College Decisions to Lifetime Wealth
What started as an effort to fix the college decision-making process has evolved into something bigger. PFR is about more than just college—it’s about helping people develop a consistent, repeatable decision process for all major financial choices. For high schoolers, learning a consistent, repeatable decision process for their college decision serves two important program goals:
Achieving college ROI and deciding whether college is the best decision "now or not yet."
Using the college decision as a good financial decision launching pad - to focus attention and practice the same consistent, repeatable decision process necessary for a lifetime of great personal finance decisions.
Beyond the college decision, PFR supports ALL major personal finance decisions, including:
Housing decisions – Understanding mortgage risk and affordability.
Consumer finance - Minimize your exposure to loans on stuff that does NOT go up in value.
Retirement planning – Structuring savings and investment strategies.
Career planning – Making career moves that align with long-term financial health.
Pet decisions - that's right, fido and fluffy are a high impact personal finance decision.
Wedding decisions - Weddings and similar events can greatly impact the new couple's financial life before it gets started!
Finally, one of our challenges at PFR is communicating the contradiction to the "College Pays" narrative. We find people naturally "believe what they want to believe" and the college pays narrative is deeply ingrained in American culture. From a young age, people are culturally indoctrinated into the College Pays mindset. It is not just a matter of "show them the data and people will change their minds." To that end, we have created a steady stream of educational content - our book, decision technology, videos, seminars, etc. to help get the word out. We are committed to the cause and appreciate it takes time to impact hearts and minds. Our belief is that "College CAN Pay" but must be considered with a great decision process to manage heightened risks.
We even resorted to a satire. Follow the next link to find a fun romp through Absurdistan. This is where a well-intended but farcical home buying program is created for the Absurdistinian citizens - this absurd program is eerily similar to today's U.S. Student Loan program.
Our resolve is great, and our resources are growing. We continue to refine tools, conduct research, and build decision frameworks empowering individuals to achieve a lifetime of wealth and financial confidence. The world has changed, and our approach to decision-making must change with it.
Resources for the Curious
* Hulett, Jeff. Wealth, Risk, and Time: The Hidden Power of Math in Smart Investing. Personal Finance Reimagined, 2025.
The Wall Street Journal. Belkin, Douglas, and Moriarty, Dylan. Calculating the Risk of College. December 10, 2018. (WSJ.com)
National Center for Education Statistics – Graduation rates, college costs.
The Institute for College Access & Success – Student loan debt levels.
Federal Reserve Bank of New York – Student loan default rates.
Strada Institute for the Future of Work & Burning Glass Technologies – Underemployment rates.
Bureau of Labor Statistics. Education Pays analysis. (bls.gov)
Hulett, Jeff. Absurdistan U: How the Student Loan System Holds Higher Ed on a Leash. Personal Finance Reimagined, 2025.
Hulett, Jeff. Maximizing College ROI: Navigating the Risks and Rewards of Higher Education. Personal Finance Reimagined, 2024.
Hulett, Jeff. Making Choices, Making Money: Your Guide to Making Confident Financial Decisions. The Curiosity Vine, 2023.
Gillen, Andrew. Introducing Bennett: Hypothesis 2.0. Center for College Affordability and Productivity, February 2012.
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