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If there's one truism that goes virtually unchallenged these days, it's that a college degree has great value. Beyond the great books, beyond the critical reasoning skills, and beyond the experience itself, there's another way that a college degree has value: Over the course of a working life, college graduates earn more than high school graduates. Over the past decade, research estimates have pegged that figure at $900,00, $1.2 million, and $1.6 million.
But new research suggests that the monetary value of a college degree may be vastly overblown.
Seems true to me. There are many positions that require a degree now, but previously did not. This is true of my job. Us young folks needed a degree to get the job. None of the senior people has one. There is no pay difference between us. So we have people in the same position and pay, but only some of us needed to spend money on an education. I asked my bosses why this is. They said that everybody applying had degrees anyway so they made it a requirement several years back.
It seems the with everybody and their dog getting degrees these days, their worth has dived. It's even harder to stand out now in the workforce.
That is an interesting article. ROI analysis as a determinate for college selection is certainly useful but is only one component of the picture. There are several aspects that need to be evaluated in the 21st century economy, but one will certainly negatively stand out by NOT having a college education or technical training/certifications.
1) Absent an undergraduate degree, one is on the bottom of the job chain. In reality, a graduate degree is really advisable in most disciplines to start. There are of course very limited exceptions, but in general one needs post-high school education or training to even have a chance in the vast majority of employment. That is simply the reality of the working world.
2) With adroit planning, it is absolutely possible to obtain an education without going into massive debt. It simply takes some intelligent planning and a mature approach to execute. Case in point, the typical undergraduate student takes more than five years to earn their degree, as noted in the article. That alone adds considerable expense to the objective. Why? A combination of changing majors, unavailability classes, inadequate financial planning and a lack of discipline in defining a path and sticking to it. One can avoid the time crunch of unavailable required classes and financial issues but it takes serious planning upfront. The issue of students who drop out is also clearly worth noting, its a prescription for poverty.
3) It appears that the article's authors didn't include the true cost (sticker minus grants/scholarships) in their calculations. That is simply not very helpful. Regardless the precise accuracy of the article it definitely makes a case for analysis of which school one chooses to attend as being a critical criteria in the selection process.
4) It would appear that many current freshman are ill prepared for college, both in skill sets and discipline/attitude required to successfully complete their education efficiently. They might be better off delaying attendance until they have developed a more serious approach to the subject. Personally, I would recommend a stint in the military as one avenue to give them an advantage in that regard.
The bottom line is that for the vast majority of folks, post-secondary education/training is absolutely a requirement for future employment. One simply needs to be very focused on what benefit you're getting for your money. There isn't much of an alternative without it.
Last edited by Pilgrim21784; 07-07-2010 at 07:46 AM..
It's very possible to do college cheaply, and if that's the case, it's a wonderful investment.
I went to a top tier private school for next to nothing because I worked hard in school, got top grades and LOOKED for schools with excellent financial aid. I scoured lists for schools that offered 100% of demonstrated financial need, had large endowments, and other signs of good financial aid. In the end, it was actually cheaper to go to my private school.
I applied to in-state public schools as well because the tuition was much cheaper and my state at the time had grants to reduce the tuition greatly. Unfortunately, the best schools didn't have much in the way of covering room and board, so that would have been an added expense.
I also worked all through undergrad and grad school to cover my living expenses so I didn't incur addition debt that way.
I work in theater, which is not financially rewarding, but I have had several wonderful positions I would not have been considered for without my degree. My friends from college are much more successful than my friends from high school without college degrees. Since many of my college friends were also able to get scholarships and graduate with little or no debt, their earnings easily surpassed those of my hs friends who had been working for 4 years. That gap will only widen as we get older.
Now, it is a horrible investment for a struggling C student to get mom and dad to shell out $50K a year and spend 6 years in college. That's just stupid.
Thank goodness nobody showed me this list back when I was considering going to college! My school on there says a paltry 10.4% ROI. I ended up receiving an academic scholarship and not paying any tuition, and today I make about $97K a year before bonus at age 32 in a job that I could never have accessed without higher education. What a bad idea that was.
As a former financial type, I like the ROI data, but perhaps should have emphasized the obvious - the lower one's investment, the higher the ROI. StinaTado and ambient both present excellent examples of that truth (note to ambient, a 10%+ ROI is pretty good). That data (unless I've misread the article), is the annual compounded ROI statistic. Not bad at all ).
My undergraduate education took me 2.5 years while working 40+ hours per week. Accelerating saved me a ton of money. However, I was not a 17 year old kid but rather a 20 year old veteran of the Marines/Viet Nam educational experience before I set foot on campus. To say the least, I was focused to get the job done and get on with my career. My military experience was invaluable in that regard.
It would be relatively silly to focus on ROI too much, its just one more useful piece of data one can use to evaluate the situation. Like all data it must be taken with a serious "grain of salt". JMO
Now, it is a horrible investment for a struggling C student to get mom and dad to shell out $50K a year and spend 6 years in college. That's just stupid.
When it comes to that, some of us are better off working in a regular job full-time and going to school part-time.
Some of us(like myself) have a hard-time multi-tasking when it comes to mentally-demanding subjects like math and sciences.
In order for us to truly succeed, we'll have to cover each one separately in order to not hit the proverbial wall.
Again, this is just my personal take on the matter as I've been dabbling in college courses for the past 8 years and haven't nailed any particular subjects on the head as have friends with degrees.
Then there's this other belief of finishing your degree as quick as possible so you could get a high-paying career, then start family, buy a house., etc
I'd rather take my time getting to know something and not get into a large debt. That and relationships, and children aren't part of my long-term plan, unless I become a farmer
It's very possible to do college cheaply, and if that's the case, it's a wonderful investment.
I went to a top tier private school for next to nothing because I worked hard in school, got top grades and LOOKED for schools with excellent financial aid. I scoured lists for schools that offered 100% of demonstrated financial need, had large endowments, and other signs of good financial aid. In the end, it was actually cheaper to go to my private school.
I applied to in-state public schools as well because the tuition was much cheaper and my state at the time had grants to reduce the tuition greatly. Unfortunately, the best schools didn't have much in the way of covering room and board, so that would have been an added expense.
I also worked all through undergrad and grad school to cover my living expenses so I didn't incur addition debt that way.
I work in theater, which is not financially rewarding, but I have had several wonderful positions I would not have been considered for without my degree. My friends from college are much more successful than my friends from high school without college degrees. Since many of my college friends were also able to get scholarships and graduate with little or no debt, their earnings easily surpassed those of my hs friends who had been working for 4 years. That gap will only widen as we get older.
Now, it is a horrible investment for a struggling C student to get mom and dad to shell out $50K a year and spend 6 years in college. That's just stupid.
My experience, as well. I glanced over that ROI list, and turns out my alma mater shows up on the "best investment" list. However, it also lists the total cost of college there at around $150k...and I paid well under $20K for four years, total, if that gives any perspective at all on the aid available at some well-endowed private schools if you've got the grades.
I'm very satisfied with my investment, and I don't even work in a lucrative field. Have never felt like it wasn't worth it, financially or otherwise.
Seems true to me. There are many positions that require a degree now, but previously did not. This is true of my job. Us young folks needed a degree to get the job. None of the senior people has one. There is no pay difference between us. So we have people in the same position and pay, but only some of us needed to spend money on an education. I asked my bosses why this is. They said that everybody applying had degrees anyway so they made it a requirement several years back.
It seems the with everybody and their dog getting degrees these days, their worth has dived. It's even harder to stand out now in the workforce.
Its likely that not only the requiremnts have changed but also the entry salry if your getting the same money.They proably piad thru experience i getting tot hsoe positions. Bascailly the natiional states show thew slary differences but like anyhting there are excetions. Not all degrees are worth much also. Even the stats for being unemplyed I saw were double for non-college in thsi recession.
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