They played by the rules. They studied hard and made the necessary sacrifices. But after four years of grueling work, today’s college graduates face the bleakest job market in decades.
To make matters worse, grads face unprecedented student loan debt with no means of even beginning to pay it back. It’s easy to see why many graduates see college as a bad investment.
The four year costs for many schools easily reaches $150,000 or more, and according to the College Board, total outstanding student debt will soon surpass $1 billion dollars for the first time in US history.
Moms and dads are opening their basements like never before to children they once thought had flown the coop forever. According to the consulting firm Twentysomething Inc, nearly 85% of college seniors expect to move back home with their parents after graduation.
Even some of the biggest names in business are now questioning the value of a college education. Some like PayPal founder Peter Thiel have gone as far as to call college education the next great American bubble.
As Sarah Lacy writes over at TechCrunch:
Like the housing bubble, the education bubble is about security and insurance against the future. Both whisper a seductive promise into the ears of worried Americans: Do this and you will be safe. The excesses of both were always excused by a core national belief that no matter what happens in the world, these were the best investments you could make. Housing prices would always go up, and you will always make more money if you are college educated.
In support of their claims they point to some of the most successful people in the world who never graduated college including Bill Gates, Ted Turner, and Steve Jobs.
Yet, the US Census Bureau has recently reported that the typical college graduate will earn $900,000 more over her lifetime than a person without a college degree.
And even though college graduates are experiencing record unemployment, their unemployment rate is still far less than that of high school graduates without a college degree. According to October US Department of Labor numbers, college grads over the age of 25 faced an unemployment rate of 4.4%, less than half the 9.6% unemployment rate for high school graduates who have never been to college.
With the world becoming an increasingly competitive global workplace, it’s not hard to imagine that more and more jobs that require less than a college education will be shipped overseas.
Do today’s young adults have any choice but to shackle themselves with debt in order to have any shot at the American dream?
BMWK, what’s your take? Is a college degree necessary for success in today’s society?
I’d have to politely disagree with this article. The problem is not the degree itself. The problem is two part. First, the droves of people who decide to take the easy road and rack up debt at for-profit schools which are not looked upon favorably in the workforce. These schools often solicit individuals to max out student loans and are more expensive than traditional schools. They’re also under scrutiny for these practices which if discredited, will make the degree useless. The credits from these schools do not transfer to traditional schools. The second is students who take out loans in degree programs which typically have little or no earning potential when they graduate (i.e. dance, art history, etc.). This is not to say these programs should be abandoned, but should be approached with caution in terms of debt. The students feel they have no responsibility in the matter. A medical or law student is expected to be able to repay $100,000 in loans…a history major…not so much. It’s time to be honest with the higher education seekers…stop taking out tons of debt at schools like Univ. Of Phoenix…and consider the earnings potential of the career field when taking out debt.
I agree with your thoughts on being mindful of the major that a student chooses. For the majors such as dance, art history, ect. I encourage students to look into perhaps taking a dual major in education so that they could teach should they be able to not find a job in their field. Although teachers do not get paid as much as some higher paying fields, the government offers teach loan forgiveness programs and teach grants that could offset some of the loans they took out while in school.
I understand your viewpoint, but it is not 100% accurate. I am a higher education administrator and am currently enrolled in a higher education master’s program. The problem is not with for-profit institutions, which many are very reputable (including University of Phoenix) and receive accreditation from proper higher education accreditation agencies. The problem within higher education, particularly with African-Americans, is access and affordability. The costs to obtain a traditional education is steadily increasing and becoming less affordable for most Americans. Many times, higher education administrators will admit that one of their primary roles is to produce revenue (most institutions, particularly those with small endowments, depend heavily on tuition), while focusing on student needs. The need to obtain a college education is increasingly important (ironically as the price goes up) to fully qualify for jobs that will provide adequate income to maintain a modest living.
As a Financial Aid Counselor, I understand the financial strain that has come with the rising costs of a college education. But the one thing I tell students is that getting an education is “worth every penny”. When I speak to students about loans, I let them know that it is an “investment” in themselves just like when you buy a home. A mortgage is a loan but it is also an investment. While a home is an inheritance that you can pass on from one generation to the next, so is a college education in which knowledge can be shared with generations to come. As with all things, I believe a person must have balance and you must be wise in your decisions when it comes to financial aid. For my students, I try to get as many grants and scholarships that they are eligible for and apply them to their accounts first (since they don’t have to be paid back) and then as a last resort give them loans. If a student has a balance I encourage them to first try to work out a payment plan or take out loans to cover the balance or a combination of both. One of the things I do discourage are students that try to get refund checks from their financial aid. Generally this is loan money and when a student takes out the maximum for their loans it causes them to get into more debt than neccessary. My advice for students is to first look at the tuition costs at various schools and the educational programs they offer and try to find a school that is not too expensive for you. In the case that you may decide to go to graduate school, you don’t want to have excessive debt should you need to take out loans in order to go to graduate school also. Lastly, I would encourage students to keep their grades up so that they could try to qualify for as many scholarships as they can because they are often merit-based and the more scholarships you have, the less loans you will need to take out to finance your education.
great response and good advice.
“No Name’s” comment covers two parts of a million-part issue. 🙂
This article is useless lol.
But here are some thoughts:
For ever Bill Gates and Ted Turner, there are 5,000 Joes, Ericas, and Janes who also didn’t finish college and aren’t making more than $40K. Pointing out the exceptions never changed the rule nor the massive effect.
Is a college degree worth ‘it’…? That question can only be answered on a case by case basis. Mine was worth it… and mine was paid for. You getting a job is dependent upon more than just the degree and school title… and some Univ of Phoenix graduates work alongside Duke graduates making the same. Who knows if either will say their degree is worth it.
I do support the realistic approach that the first two commenters mention. Researching job + earning potential, happiness, goals, locations, etc… are very important in mapping out our lives.
And as with any notion Americans have had for the last 50-100 years (see ‘homeownership is for everyone’), we should re-evaluate and see what fits our lives best before buying into it.
To be fair, there are Joes, Ericas, and Janes who did finish college and aren’t making $48k, either. And most of us are in the humanities — english, religion, philsophy, etc. We used to joke that the halls of the science buildings were paved with gold, but that we filled the old, dusty library.
The idea that only money-making careers are ‘worth it’ is problematic, especially when most kids are hardly, if at all, exposed to the arts and literature in school.
I agree. ‘Worth’ is more than financial also.
http://www.cmediausa.tumblr.com
The article is addressing worth in the financial sense…not fulfillment. If someone is going to make a conscious decision to take out $50K in student loans while studying art history, is it fair for them to graduate and then cry foul play when they cannot repay the loans? They must be held accountable. There are always options. I.e. teachers…most states have enacted student loan forgiveness programs IF the teacher is willing to put in a little time in a critical area of study at schools that need quality teachers. Whose fault is it if that teacher feels they are “too good” to spend 3-5 years to have that debt wiped free?? Not the loan issuer!
My best friend teaches at a for profit school. He failed a student for not doing any of the assignments…the administration advised him to pass her…basically, you can’t fail. If a student can’t fail, are they really learning anything.
Schools like Univ. Of Phoenix were great for the professionals in the workforce who had been in a job for a while, but need a competitive advantage. But for students who have no experience in a field…the fast paced/internet extensive curriculum of for profit schools is a waste of time and money.
India and China has surpassed our educational systems because the majority of students born in the US embark on degrees in the social sciences and arts, unlike our competition who choose engineering, medicine, and technology.
I like how you think ‘no name.’
Yes, a college degree is needed….The exceptions to the rule are just that: exceptional geniuses…not every man…In fact, President Obama has created several programs in order for more people to go back to college to prepare themselves for what is becoming an increasingly competitive market…not all degrees should be pursued and that is where wisdom is necessary, still a degree is just about a must!
I think asking the question “Is college worth it” is like asking whether it’s worth it to start your own business or start a family. Although we have been trained to believe that college is the guaranteed road to success, the reality is that there are many factors that play in to whether or not it will be worth it for one person verses another.
I do agree with Peter Thiel in that unless you are going into some type of guaranteed money making field, if you’re going to college and thinking you’re going to come out with a guaranteed higher salary and job security, you’re wrong, and I think that will only become more true as time goes on. I think that college can be a road to success, but it isn’t the only road and I think it is going to become more and more important to decide whether it’s worth it on an individual basis rather than saying that it is worth it for everyone.
“I do agree with Peter Thiel in that unless you are going into some type of guaranteed money making field, if you’re going to college and thinking you’re going to come out with a guaranteed higher salary and job security, you’re wrong,” It is really hard for people, esp. the younger ones, to look past that. If you watch CNN, they now feature the “money making careers” for college students. In some years to come, those fields too will be over saturated.
Is it worth it? Depends on the individual. What are their career goals? If they’re looking to move up the corporate ladder, then yes, they’re more than likely need a BA/MA to get those upper management positions. If it’s their goal/dream to become an entrepreneur they may not need a degree. For profit schools make it a lot tougher, but they market their job placement statistics and get the students hook, line & sinker. Like mentioned above, it’s a case by case basis.
I’m in school for the knowledge. The things that I am learning and the people that I am meeting along the way are worth it. I am in one of those liberal study programs that don’t have the potential to make a lot of money; but, what I do know is that I will be fulfilled. I have created contingent plans; which is important when choosing non-high paying careers. For example if you chose Art History – how many workshops can you create. Many people have interest in it and if the price is right, people will attend. The money may only pay for supplies or venue, but with time and patience, you can see that you may be featured on TV, Magazines, …. We really just need to think outside the box more often than we are doing now (as a whole). We have been soo conditioned to work at a job, make a lot of money, blah, blah, blah. There are but soo many jobs available.
My plans include book writing, speaking engagements, etc. Again, we need to think outside the box that we all find ourselves in.
I absolutely believe that a college degree is worth it. As the author states, the earnings potential for a college graduate is much higher than one who has only graduated from high school.
Now, let’s talk about the massive amounts of student loan debt being acquired. If your son or daughter is interested in going to college, you need to to start talking to your kids early about their grades, requirements for college, and funding for college. Too often parents wait until a child’s senior year to let them know that they can’t afford XYZ school. Parents need to be upfront about making good grades, applying for scholarships, and searching for schools that are not going to leave them in mega debt.
Also, be realistic about if your child is college material. Every one does not have to go to college; however they need to plan on working, going to the military, or getting a trade (electrical, plumbing, etc.).
Valid points Wanda, especially the role of parents in guiding their kids. There’s a lot to think about and if kids (many of whom in the African American community see education as the critical means to upward mobility) want to go to college they need guidance on the requirements, financial support options and suitable schools. I’d love to hear from parents on what keeps them up at nights about this topic. This is a topic that could be revisited BMWK.