We love degrees and the doors they can open but we hate the price it costs to get one, both emotionally and financially. Higher education has brought both happiness and heartache for those who try to pursue it. With a highly competitive application process to get in and student loan debt when you leave, attending college takes a high level of resolve to obtain a coveted degree.
At one time it was more affordable and those who underwent the entire education process were rewarded for their tenacity, hard work and dedication with higher paying, higher level positions upon graduation. Today, many students are questioning their return on investment and whether or not it’s worth the time, as well as cost, to earn the degree that may be no longer a differentiator but a requirement of sorts to gain entry into the white-collar workforce.
Our Road to a Love for Higher Education
50 years ago, blue-collar jobs (jobs that required manual labor of some sort) accounted for over 30% of all non-farm jobs in America. By 2016 that number fell to a low of 13%. A mind-set took over the nation that success was defined by what your mind could produce not your hands (aka white-collar jobs). To some extent this is true, but it doesn’t negate the need for construction workers, plumbers, electricians, and the like. Even so, more and more students began looking to higher education to develop their minds.
The timing of this shift was serendipitous with an overall improvement in graduation rates from high schools across the country. In 1970, on average 55% of high school students earned their diploma, compared to over 90% of students in recent years. When you also consider the general population of the United States grew by more than a third during that same period, it’s easy to see how the pool of prospective college students has grown exponentially over the years, both in percent of students eligible to attend and the increase in the absolute number of that group due to overall population growth.
Over time, while our interest in higher education increased as well as the number of prospective students; the only barrier to attending college that might have tempered the number of college applications, would have been cost (i.e., tuition etc.) but that was addressed by the Department of Education with the institution of federal student aid.
In 1965 the federal government passed the Higher Education Act. This Act offered federal grants and made low interest loans available to students who demonstrated financial need. Before then, those who could afford to go to college, simply paid and those who could not most likely pursued work. Once cost was no longer prohibitive, helped by student loans, college attendance began to skyrocket, growing from 7.5M students in in 1970 to a nearly 20M in 2020 between undergraduate and graduate students.
The Perfect Storm
According to the U.S. Bureau of Labor Statistics, you can expect to earn two-thirds more with a college degree than a high school diploma alone. This statistic alone is enough to convince most everyone they should consider a college degree. Add to this that there are many employers who require a college degree from applicants for consideration of employment and the decision to get a degree is all but made. I degree not only leads to more money, but it also helps open doors to employment opportunities.
As more students made their way to institutes of higher learning and demand increased, so did tuition and other educational costs. As these prices increased, no one seemed to notice or mind, assuming salaries on the other side of the degree would more than compensate for the added costs. Students simply borrowed more money and did whatever it took to get to their goal – a college degree with the hope of career and financial stability.
However, a storm started to brew when rising college tuition costs outpaced inflation by 171.5% over the past several decades. To understand this point better, consider that the annual average cost of a state college in 1970 was about $400/year with a median income around $9,800. Annual income at that time was about 20x that of annual tuition. Compare that with today, with state tuition running about $9,700/year and the average median income of about $57,000, annual income is only about 6x that of the tuition. The ability to cover the costs of college after graduation has diminished over time and we are seeing that with the current student loan debt crisis.
This has left us with a system that offers few alternatives and/or desirable options to achieve the same results. To get a degree, you must go to college. Colleges have become extremely competitive to get and the cost to attend has grown exponentially. Today we find ourselves at an impasse. Go to college to have a chance to earn more, but how much more, and will the degree still be able to pay for itself.
What Do We Do Now
To begin, we need to change our mindset that a college degree is a silver bullet to a success. We need to get smart about the return on investment for specific degrees and colleges and be realistic with our expectations. Think about the job you hope to get afterwards and research the annual salary. Compare that with the cost to get the degree for that career and determine if you think it’s worth the investment.
Consider taking advantage of lower cost options that will yield the same or similar results, such as community college, attending university part-time, certificate programs that may also open doors to employment or even delaying the degree while you work to save money to apply towards college. There are options out there so that you don’t have be saddled with debt upon graduation.
Finally, when selecting a college, be conscious of cost for sure, but also think about on-campus recruiting for your major, cost of living around campus and local employers that might want to hire in your chosen field. These things can help you get an internship that can help cover costs, manage your budget, and potentially have a job lined up well before you walk across the stage to accept your degree.