According to a 2014 study on the value of college from the Pew Research Center, college graduates are outpacing their peers in “virtually every measure of economic well-being and career attainment.” This includes average annual income for full-time employment, poverty and unemployment rates, and job satisfaction.
For example, when study participants were asked if they were “very satisfied with their current job,” 53% of college graduates with bachelor’s degrees answered favorably, compared to 36-37% of high school graduates and people who have some college experience or an associate’s degree.
Have you considered going back to college for a bachelor’s or advanced degree? Or are you debating whether college is worth it for your kids compared to jumping into the workforce or going to trade school? If you answered “yes” to either of these questions, or you’re simply interested in reading whether college is worth it in today’s labor market, then this article is for you.
Is going to college still worthwhile? Is it worth the cost? Maybe...maybe not. Here's why.Click To TweetIs Going to College Worth It Anymore?
The Student Loan Conundrum
According to a 2014 data analysis presented by the Institute for College Access and Success, 69% of college students from public and nonprofit universities in the U.S. graduate from college with student loan debt. This encompasses both federal student loans and private student loans. The average debt burden for borrowers was $28,950 in 2014, and with debt increasing at twice the rate of inflation, that figure will likely only get higher.
The Federal Reserve Bank of New York recently reported that student loan debt in the U.S. is now over $1.23 trillion. Sometimes you even read stories about people who have 6-figure student loan burdens, and it wasn’t until the Health Care and Education Reconciliation Act of 2010 passed that borrowers could make payments based on 10% of their discretionary income and achieve loan forgiveness after 20 years.
With all this gloom and doom, it’s easy to see why college might not be worth it for some folks, simply because the financial burden is too great and the depressing statistics are splashed everywhere in the news. However, according to the Pew Research Center’s study, we talked about in the introduction, 72% of Millennials ages 25 to 32 said college has already paid off for them. Furthermore, 86% of the college-educated Millennials who took out loans to pay for their degree reported that their degrees have been worthwhile or they expect their degrees to pay off in the future.
Live with Parents or in a Dorm?
In 2015, the Pew Research Center reported that, despite improved economic conditions, the number of Millennials who live with their parents is actually on the rise. 26% of Americans aged 18 to 34 live with their parents, and this number is likely higher for people going to college.
Living with your parents is a good way to save money for other expenses like tuition, fees, textbooks, parking, and other school supplies. However, this decision can hamper your socializing opportunities due to long commutes to campus from your parents’ place, and if your parents have strict rules about coming home at a certain hour or having to do weekend chores, then your independence will be further limited. This can be frustrating for new adults who want to establish themselves separate from their parents and live the true “college experience.”
If the typical college lifestyle outweighs the cost savings of living with your parents, then living in a dorm is another option. But dorms are oftentimes cramped and expensive, costing an average of $8,887 per year at public universities or $10,089 at private universities. Sure, this cost probably includes a meal plan, but eating campus food all the time can get unhealthy and boring pretty quickly.
Compare the above two living circumstances to the person who decides to go into the workforce right away instead of college. They may not make a lot of money right away, but they’ll be able to spend money on rent instead of textbooks and save thousands of dollars for a down payment on a home instead of funneling all that money into tuition payments.
Short-Term Pain, Long-Term Income Gain
College graduates who have to borrow money to pay for their degrees have it rough for the first few years after college as they land their first “real” jobs and scramble to make their student loan payments on time. However, it’s proven that college graduates earn significantly more money than non-graduates over the course of their working lives.
According to a March 2016 report from the Bureau of Labor Statistics, full-time workers with a bachelor’s degree have median weekly earnings of $1,137 and an average unemployment rate of 2.8%. Meanwhile, full-time workers with an associate’s degree make just $798 per week on average, with a projected unemployment rate of 3.8%. Full-time workers who only have a high school diploma have median weekly earnings of $678, with an average unemployment rate of 5.4%.
So what do these statistics mean? Although high school graduates and associate’s degree holders make money earlier than people who choose academics over full-time work for a while, the lifetime earnings gap widens exponentially once college graduates enter the workforce. In fact, college graduates make an average of 84% more than high school graduates over the course of their careers.
If money isn’t a major motivating factor and decidedly not worth injecting thousands of dollars (in the form of student loans) to obtain a higher education, then perhaps college isn’t worth it. But from a strictly economic standpoint, a college education will likely be extremely valuable for decades to come.
Post-College Job Opportunities
The Bureau of Labor Statistics’ Occupational Outlook Handbook has future predictions for hundreds of different jobs. You can browse jobs by Highest Paying, Fastest-Growing, and Most New Jobs (projected) across several different sectors. This is a useful guide for potential and current college students who are trying to decide their career paths. The handbook is also useful for trade school students who want to pick an industry with the best career prospects.
As of May 2016, the career with the fastest-growth projection is wind turbine service technicians, with a median pay of $51,050 per year and a jaw-dropping expected growth rate of 108%. This job requires only some college (if any) and mostly on-the-job training. Perhaps the pay doesn’t compare to other in-demand jobs that require at least a bachelor’s degree, but it shows that there is demand for skilled workers, just as there’s demand for educated workers. A college degree isn’t necessary to find a stable career, but your lifetime earnings and satisfaction derived from that job depends on which industry you go into (the same goes for college students, too!).
Perhaps the pay doesn’t compare to other in-demand jobs that require at least a bachelor’s degree, but it shows that there is demand for skilled workers, just as there’s demand for educated workers. A college degree isn’t necessary to find a stable career, but your lifetime earnings and satisfaction derived from that job depends on which industry you go into (the same goes for college students, too!).
The Social Benefits of College
There are some things you just can’t quite experience the same way outside of college. There are clubs, Greek organizations, parties, student events, honor societies, networking opportunities, and many other social benefits that make college so much more than just academics. Obviously, college isn’t the only place to make friends and network with professionals, but college is a convenient gateway for these opportunities.
However, some college students spend more time at parties than in the classroom, and if they pay thousands of dollars in tuition just to drop out later or get a low GPA (a bad sign for future employers), then college probably isn’t worth the financial investment.
Is college worth it? The answer depends on the individual. Societal trends – as reported by the Pew Research Center – certainly indicate that a bachelor’s degree or higher is not only worth it but critical to surviving in the workforce nowadays.
However, the gloom surrounding student loans is off-putting for a lot of people. On a personal level, it’s up to you to decide what you value more: saving money in the short-run and finding a stable job with fewer educational requirements OR the potential to earn substantially more money over your lifetime by spending a couple of years earning a degree and dolling out thousands of dollars for a piece of paper that will qualify you for better-paying jobs.
