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I work in higher education and have for the last 7+ years ever since I graduated. Not only do I work in higher education I’m also a current student so clearly I have staked my future success on the education I have received and will receive in the future. But even so, many people I know (including myself and my wife as well as several friends) have made mention of the fact that college degrees just aren’t worth what we were told they would be all those years ago. This op-ed at NPR agrees going so far as to note that the entire higher education system is broken.
From the transcript:
Prof. HACKER: Well, Zach has an interesting point here. Currently, about 30 percent of our population has or will have bachelor’s degrees. And it’s moving up to about 35 percent. It’s really – we’re turning out a million and a half BAs every year. So we’re not talking 30, 35 percent. That’s a pretty large group. Now, I do agree with Zach that most of them have been in large lectures filled with PowerPoints, taught by overworked adjuncts and teaching assistants. They’re not getting much of an education. They’re not getting a chance to use their minds. And we would like to see everybody have, let’s say, for example, small seminar.
Earlier in the interview Professor Hacker talks about some private educational institutions charging $50,000+/year in tuition. With so very many workers with bachelor’s degrees available in the workforce all learning similarly useless information, how can this extremely expensive degree (and one which will only get more expensive due to funding cuts and, “because colleges know they can keep raising their prices as theyve been doing, well ahead of inflation, and the students will come and take out loans.”) actually benefit anyone in the future when they have to dig themselves so deep into debt to pay for it?
Post-secondary education in Minnesota is far different than where I grew up. We were taught that you were to go to college and get a bachelor’s degree. Community colleges and technical schools, which were few and far between as it was, were reserved only for those who were at the bottom of the barrel academically. Your choice was simple: go to a four year institution and graduate or suffer the dire consequences of a life without a bachelor’s degree–oh the horror.
Looking back on my college education I have to say that I was misled. I felt I was a failure that my first job out of college started at $9.50/hr and that my second job, which I moved several states away to take, was not much better at $12.23/hr. It was my understanding, based on everything I was ever told in my time in the United States education system that I would start at $45,000 to $50,000/year and only go up from there. Is it wrong that we are pushing so many students into degree programs which really may not be well suited for them because that’s the “best way” to do it? Why are we telling students they are going to start at $45,000+/year when that’s what a majority of US workers top out at when they retire?
Being that I have a very young son who needs to have us saving for his college education, which will likely cost 4x as much as we had to pay, I want to know what others are planning to do with their kids? Will you fight the suggestions provided by secondary institutions to push four-year degrees on students throughout their college prep days or will you embrace it and push your children to go for it? Do you think that your own degree has provided you with the results you were taught to expect after graduation? Whatever you think about the NPR piece on how the higher education system is broken or what you are planning to do with your own children when the time comes go ahead and comment on as I’d love to hear what you have to say.
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August 4th, 2010 at 8:57 am
Worth it? That’s debatable. I suppose it all depends on what you want to do or where you want to work. Do yourselves a favor, find or figure out what you love to do, and just to that, because getting up to go to work every morning just to earn a paycheck is WAY overrated.
I said, debatable above, because you have these corporations that won’t even let you in the door without a piece of paper that notes, BS or BA on it. Then some will let you in, on the ground level, but won’t let you move up the career ladder, regardless of how brilliant you might be.
Some notables that don’t have college degrees.
Bill Gates (granted, he did attend Harvard)
The Facebook CEO d00sh (same thing, harvard)
Steve Jobs
Larry Ellison
the list goes on.
What’s the point? Brilliance doesn’t come with a piece of paper but the suits in typical corporate america do. And if you want to be in their club, you have to play by their rules. In many cases, that means going into deep debt to earn your degree, like me. And then there’s grad school. Where do I start with that. Started it, and took a leave the second class in. Having a medium sized family, only working parent makes it tough, REALLY tough. I’ll have to wait for the kids to get a little older.
August 4th, 2010 at 9:15 am
It really depends upon what you want to do. There are some jobs where a degree is absolutely essential to get in the door and/or get promoted, but many other jobs where someone will be happy to take your money for college classes, but that isn’t going to get you a job.
I have a BS in Math, with an emphasis on calculus and statistics. Never, ever used it. Hubby has a BA in sociology with an emphasis on criminal deviance. It was a required hurdle to be an Army officer, but most of what he “learned” in his soc classes was a load of hooey.
Hubby wanted our kids to go to college. So far, two have tried, and hated it, and are now in the Army. Oldest does computer networking. He is in Afghanistan right now, and I just sent him another study book for a certification – he doesn’t need college to get ahead, he just needs to pass the certification tests. Middle son is currently in basic training, and then is scheduled to go to training to become a bomb tech. Very specialized field, where college is irrelevant, because they don’t teach it there.
Two of our middle son’s friends want to be firefighters. In MN, going to fire science school doesn’t do squat to get you hired, but there are several schools that will take your money anyway.
Our next door neighbor just graduated from St. Olaf. He is working at Fed Ex, in the same job as his dad, who had no college.
There is a huge disconnect between what businesses need in their workers, and what colleges are churning out, and if anything, the divide seems to be getting bigger, not smaller, over time.
August 4th, 2010 at 9:40 am
I have two recent college grads. My son, graduated in 2009 with a degree in Biology and minors in Chemistry and Spanish. His area of interest is conservation biology. Currently, he is working with the Minnesota Conservation Corps which is an offshoot of the Minnesota DNR and funded by Americorps. He isn’t making much, but is learning a lot and working his way into either the DNR or the US Fish & Wildlife. He has a small amount of student loans that Americorps will pay off by his service. It’s not a bad gig, but he really would like to get the “big boy” job soon. There just isn’t much available in his area of interest. I feel that he is on the right path though.
My eldest daughter graduated this May. She has degrees in Phy Ed and Health and a minor in Coaching. She has been on a few interviews and posted her resumes, letters of recommendation, etc. for many positions. Unfortunately, there are a ton of out of work teachers. She gets beat out by ones with more experience, but she was a close second (so, they say). She has an interview tomorrow for a part time, long term sub in the district. If nothing pans out, she will be substitute teaching in as many districts that she can. She did land an assistant coaching job for the winter. Her latest ploy is dying her hair brown from the college blonde hoping that she will be taken more seriously. I think that the job will come, but it might take a move out of the area.
Luckily, they both can work part time to supplement their earnings in my brother’s business. He lets them have very flexible hours and work when they can.
Very few of their friends have landed a job after graduation. It really seems that a lucky few that get the jobs. Those seem to happen after interning in a company during college, networking with friends and family or just having the “hot” degree. It seems like the computer science and accounting degrees are good ones to have right now.
August 4th, 2010 at 10:23 am
Higher Education is failing in their value proposition. By and large, they cost the most and provide the least benefit, both to the student, and society. Community Colleges try to span the line between higher ed (transfer programs) and Technical schools (job specific programs) thus their value varies. Technical Colleges generally provide the highest value assuming the skill you pay them to teach you is one that is in demand at the time you graduate.
I didn’t push my kids towards college. I pushed them towards trying to find what they enjoy doing that they might find someone to pay them to do it. If they can figure that out, then we can figure out what education is the best one for them. I don’t believe either have figured that out yet, though they both have found a couple things they like to do, but finding someone to pay them to do it might be challenging. (I.e. Be a Rock Star isn’t exactly something easily achieved)
August 4th, 2010 at 10:39 am
In my 4 years of undergrad and three years of post-grad, I have never had a class with more than 40 students. I went to a small Christian college, and am now at Metro State. I would be very disappointed if the professor never showed up to class and just sent the TA (which Metro doesn’t have).
I got a job right out of school (the first time), in my field, and made decent money.
But my husband only has 1 year of college, and makes 3x what I do, and co-workers with degrees usually get fired (because the degree doesn’t actually mean they know how to do the work).
It does matter what field. There are some fields where you just need a degree (or licensure, certification, whatever). Others you don’t. There are graduate degrees that you obviously need an undergrad degree to pursue. But, there are plenty of “useless” degree programs out there. Does no one ask the history and English majors what they actually plan on doing with said degree?
But, I do think that in many ways a bachelor’s degree from a Liberal Arts college is useful. Perhaps not $80,000 valuable, but useful. It’s like high school, but more expensive. Required English, math, science, and history classes are supposed to create a well-rounded, informed student. Supposed to.
August 4th, 2010 at 11:28 am
I’m not sure what we’ll do with our kids and college yet. Our plan now is to have a certain amount of money if we are able, and the rest is up to them, but we will fund our own retirement accounts first. It really depends on the type of individuals they end up becoming as to whether or not they will be encouraged to attend a 4 year institution right after high school. I have seen many people just going into that environment and failing because they weren’t ready and didn’t have a clear goal, so it seems there is no sense in pushing that option.
My college was fully paid for by my parents, Ben’s was (and still is) fully paid by him. We both worked at least part-time throughout college, graduated in 4 years, and had full time jobs set up before we graduated. This probably has less to do with college itself, and more to do with the type of people we are. Higher education is worth it if you know what you want to do, and if that requires a degree, OR if you place value on the experience of education and learning itself (which I personally do not – I view both my degrees as a means to an end). We both went to the U of M and paid in-state tuition, so I’m on the fence on if the super expensive private schools are actually “worth it” but they might be to different types of people.
I would say that I use less than 10% of my actual college education in my job (or former jobs, since I am in a different field now) BUT, more important than the actual classes was the experience of living on my own, paying bills (my tuition was paid, the rest was up to me), following a schedule and being accountable to get places without anyone telling me what to do. College is a great transition between being a child and being a real adult.
So, that was a very long comment all to say “it depends” :)
August 4th, 2010 at 11:57 am
For all of you English majors, I hear there is now a demand for essay writing careers in Apple Valley.
August 4th, 2010 at 12:16 pm
Ahh the question of question of Higher Education being worth it. It all comes how to how you define “worth”. What do you want to get out of your degree? Are you getting a degree in a field because you love the field and have interest in it or are you getting a degree in a field that you tolerate to open doors in a field or occupation that will support a family and come with the benefits to support a family.
I know it may sound harsh, but paying to get a 4 year BA degree in history, arts, political science, library science, english etc and your intent is not to either be a teacher, which today really requires a Masters Degree to be competitive, or you plan to go to law school is a complete waste of money but if it is what you love and want to do, great, you just need to come to terms that with this degree it is not going to open doors to job opportunities that are starting at higher than $40,000 a year.
My personal take is that in today’s society and job market you need to make a decision to find your passion in either a trade, electrician, plumber, auto mechanic, etc or focus on the sciences, engineering, accounting or masters in business and get a degree in these fields to make college “worth” it.
My advice is sit down and look at the world today, look at the US job market and pick out the top 20 professions that there is going to be a demand for in 5 years, nurses, doctors (really not worth it in my opinion from a time, pay perspective when you look at the bill you are going to have after 8 years ) unless you are a specialized surgeon, plumbers, electricians, physical therapists, dentists, dental hygienists, Computer Scientists, Electrical Engineers, Mechanical Engineers, accountants and the military. Pick from these 20 professions or areas of expertise and obtain the degree or certificates required to get in the door in any of these professions. Do it as quickly as possible, a BS should be obtained in 4 years and if that means going to summer school and extension classes, do it. Get your degree or certification and get in the market generating reveue to pay off your debt and grow your career. If you do not like any of these 20 professions and still do not know what you want to be, go to your local community college and begin taking courses that will transfer the basic credits to a 4 year college or will be relevant to a trade and get a job to pay for these courses while you are still trying to figure out what you want to do.
Bottom line, get a degree or obtain the training for a trade in a field you believe you will be able to “tolerate” doing for 40 years and look at the salary that the market is willing to pay for that trade or degree before you start down your education path of choice because while you may be happy with your degree or trade of choice, the fruit it brings to bear may make you unhappy.
Trust me, being unemployed with $100,000 of debt working four part time jobs in retail or the services industry because you went after a degree for passion and not what the job market will support is not going to make you happy in the future.
The other activity that needs to happen from day one of school is networking and internships. Do not wait until you have a degree or your trade school completed to start this activity. There is a lot to be said for it is not what you know but who you know. I believe that nepotism plays a major role in many employment opportunities today so take advantage of this. Getting an internship with a company along with a can do / will do anything attitude, will go further than you can imagine. In today’s market if you have a rigid idea of only landing a job in the area of your degree, and are not willing to do anything else, forget it, you might as well go apply for a job in the services or retail industry for $12 an hour with no benefits.
August 4th, 2010 at 12:17 pm
I knew in college that I wasn’t going to get a $40K/yr job when I got out. I was a history and political science major. I was really happy when I got any job.
And yes, it is absolutely worth it, assuming you want to work in a job that’s not a firefighter, UPS driver, bus driver, etc. And even in those jobs, if you want to promote you may need a degree. My husband is a bus driver, but he gets to also work in the bus company part time as a trainer and a garage coordinator. Without his degrees, he may not have been given those additional responsibilites and additional pay.
Me, I went on to graduate school and pay $500/month in student loans. But I make more than $500/month more than the job I would have been stuck in if I hadn’t gone on to graduate school. And my graduate degree got me the job that got me this job.
Most people don’t regret going to college, buy many, many people regret NOT going.
August 4th, 2010 at 1:19 pm
Kassie, you are exactly right, a degree is a key to one of the gates in the employment process. The challenge in my opinion is how to get a relevant degree that will open the gate for the largest number of career opportunities that exist in the market, in the shortest span of time, with the least amount of cost. I think that if you keep these three criteria in mind when obtaining a degree, relevancy, reduce the time to obtain, and reduce the total cost to obtain or debt associated with earning the degree, one will absolutely say that a degree is “worth” it. If people do regret getting a degree and going to college it is often because their degree is not relevant when they receive it, they regret taking 6+ years to obtain it, or they find themselves saddled with a higher debt load than what they found a job to support the debt they accrued.
If you take a step back, what you are doing is marketing yourself as a product to the market. Look at Apple / Amazon / Microsoft / B&N and the iPad, Nook, Kindle or iPhone, what do these companies focus on when they develop and release a product? Relevancy and differentiation, do people want to buy the product, what sets it apart from the others? How long is it going to take to bring this product to market to beat their competitors to market and actually begin recognizing sales, and finally minimizing the cost to bring the product to market. I believe one should take the same approach with obtaining a degree and the more effectively you can manage these aspects the more the product, you, will be valued in the market place and you will be in a much better position to succeed in your career and feel that your degree was “worth” it.
August 4th, 2010 at 1:41 pm
There is an equation that I have heard spoken about lately.
It relates to the time that a it would take a student to get into the black from a college education. Total earnings – (cost of education + amount of money lost by not being in the workforce) = Years to even
If this equation is taken seriously, then there are three factors that influence this discussion. 1. Cost of Education, 2. Years of education, 3. Total earnings after education.
Therefore, 1. The cost of education should be kept as low as possible relative to the eventual total earnings. For example, it may pay off for a student to pay to go to the University of Minnesota over going to Metropolitan State.
2. Education should be done as quickly as possible relative to the time that a student is out of the workforce. So if a student is working full time and making decent money, it makes sense for that student to take longer to complete the education.
3. Total earnings after education should influence the cost of education. It makes very little sense for a person to go to a small private college, go into $100,000 of debt in order to get a teaching job or a social work job.
All of this does not take into account that if one can afford it, education is an amazing personal experience. I think that this kind of education is very difficult to get at a large university in a lecture hall of 350 people. But if a person cannot afford this type of education, there are lots of other more economical personal experiences. Go backpacking, geocaching, kayaking, build a Lego model, write a song. All these are free.
August 4th, 2010 at 2:39 pm
I’ve known plenty of people with English, history, art, etc. degrees in the corporate world. It’s not all people with business and accounting degrees, which by themselves will not get you far in this job market. Regardless of the degree you have, it’s about showing that you have the needed skills. And, of course, networking like crazy.
I’ve also noticed that employees with Masters degrees are becoming a lot more common than they were several years ago, and I suspect that they are starting to become the new Bachelors degree (especially since employers can get workers who have them for relatively cheap right now).
August 4th, 2010 at 2:55 pm
A college education is not necessary, but in today’s economic times, an individual without a degree is 99% more likely to not obtain a job within the business world (at >$45K/year) than an individual with a degree. As time goes on, my personal belief is that it will only get tougher for those without a college education. Granted the degree itself doesn’t get you a job; experience plays a very large role and most times the only way to get the experience is to attend a 4-year institution and obtain a degree.
Experience is just about the largest selling point of a person when I look at individuals’ resumes and if you don’t have adequate experience you’re going to get looked over. Sadly most times, the only way to get most experience is to start at the bottom and most employers won’t even speak to you if you don’t have a degree… somewhat of a catch-22.
My take is it’s essential that if you’re going to go to college, treat your studies as priority #1 and it will pay off. If you just go to college because you’ve been told you have to, I feel sorry for you. I didn’t always know what I wanted to do (still don’t know what I want to be when I grow up) but I’m a rare individual who’s been in the real world work-force and have been applying my degree to my job for the past 10 years. Get your degree in something you enjoy, but keep in mind the demand in the real-world workforce when making your decision on your major.
There have been hundreds of studies conducted showing what people make over the course of their lifetimes with and without college degrees. As a another poster mentioned, there are rare individuals who have become super wealthy without a degree (some without even a HS degree), but they are exceptional cases. The latest study I saw was in an Edward Jones publication that stated an individual with a college degree makes $750K more over the course of their lifetime as compared to only a high school degree. I’m a numbers guy, but just about anyone can figure out that most 4-year college expenses don’t exceed $750K.
College also teaches “kids” how to prioritize their life and very fundamental everyday life lessons. From my experience, I see/saw the individuals who paid for their tuition themselves got much more out of the experience (& a degree) as compared to the ones who had everything provided for by mommy and daddy. With this thought in mind, my wife and I are planning on aiding our children with college expenses, but will only be providing 2 years of financial support in an attempt to help them learn through the virtue of self ownership.
In the end it comes down to having some sort of idea of the direction you’d like to take with your life. There are people that enjoy working construction 5, 6, or even 7 days a week. There are people that enjoy sitting behind a desk and working in the business world from 8-5 each day. But on the contrary, there are also individuals that dread going to work each and every day… if you can find something you enjoy doing, it’s often more rewarding than a salary figure you wished you had.
August 4th, 2010 at 3:17 pm
As previously noted, the issue is cost to benefit ratio.
If you are optimistic about the economy and the USA long term then i would say a BA that you might pay $100,000 to 200,000 to obtain is possibley worth it. (caveat is that a degree in engineering or accounting is likely to return better than one in sociology or English) If you are pessimistic about the long term economic outlook for the USA then it is not worth it.
I tend to be in the pessimist (we call ourselves skeptics) camp. Given the recent end of the bubble economy, the necessary deleveraging and the process of capital moving toward growing economies in Asia and elsewhere i cannot see the outlook for job security or income growth very rosy. Manufacturing is or has moved overseas. Engineers and software developers are cheaper in India and China, some medical diagnostic services have even sent blood samples overseas for testing, and the fact is growth is occuring there– both manufacturing, infrastructure and consumer spending growth. so the question is begged… is it truly worth it?
The biggest problem is cost, if you are going to burdened with over 30,000 in loan debt (there are many true stories of people with over $70,000 in debt) you are likely not in good condition. the salary required to finance loan repayment on 70,000 is not out there anymore for at least 90% of graduates. Even Medical doctors are being forced into very specialized practices in order to pay off loans as salaries for General Practicioners dont offset educational costs anymore. (see shortage of doctors in rural regions for same reasons)
So i think it is a very tricky situation. I believe in a well rounded college education. But i am advising my kids to consider specialized skilled trades instead… ones that require two year degrees. (they have already shirked the advice, one is working , BA in biology, another graduates in December with BS in Mech Engineering, final one is majoring in English and Sociology with a Spanish minor)
I also think that the 4 year colleges need strong serious competition to get their tuitions down. Call it socialist, but i would strongly advise the govt to give every qualified student 2 years free education at the community or technical college of their choice. This accomplishes 3 things… lowers cost of education for the students and their families, puts money into local levels of input , rather than at more regional levels, and finally puts pressure on major 4 year colleges to compete. I also think that the deal should be that after 2 years of community college you go to a regional state college at a special rate of tuition…. once again putting pressure on the elite colleges to compete. if you take into account the level of debt, some of which will not be repaid, and the inefficiency of the debt ($50,000 of college loan debt for a degree in communications?) it is probably wiser to have the govt spend the money this way.
Barring some epoch changing technological development that transforms the USA into a new millenium of economic vitality… i would rather advise young families to get their kids to learn chinese instead.
August 4th, 2010 at 3:47 pm
Related to the salary issue… recently it was suggested that early childhood education also plays a role in adult success / income.
http://www.nytimes.com/2010/07/28/business/economy/28leonhardt.html?scp=2&sq=leonhardt%20kindergarten&st=cse
August 4th, 2010 at 4:40 pm
A degree is valuable. spending all four years at a 4 year college is not. Start with a jounior college in high school and get two years worth of college credit for a fraction of the cost. Then only two years are required to get the B.A. or B.S.
I agree that the trades are a great way to make a living, but sooner or later your body will fail you. You don’t see too many 60 year old masons, or carpernters, they have all worked hard to become supervisiors, which often requires education or training beyond high school.
August 4th, 2010 at 9:51 pm
I pretty much agree with all of the above. I think one rationale for higher education is “putting in your time” to society. You have a degree, you’re more likely to earn a better salary.
I don’t use my degree (elementary education) but I’m glad I have it. I started in community college and finished at St. Kate’s, by the time I was finished with college I was already working full time with my current company. I couldn’t afford the pay cut from a corporate job to teaching, not to mention the lack of education jobs and the uncertainty of a job year to year (until tenured and even then, nothing is 100%). Add that to the amount of work outside the classroom and honestly, I’d rather have my free time than be tied to lesson planning, grading papers, etc.
I’m proud I earned my degree, but in reality, it is an awfully expensive paperweight that I will be paying for until our house is paid off (seriously, both loans end the same year and month).
August 5th, 2010 at 8:21 am
It really depends on the position that you want. Many jobs require education and quite a few certificates. But many jobs either weight experience and education equivalently, or weigh experience greater. It really just depends. Thus it is important that a youth spend some time working out what it is they like to do vs what it is they can get paid to do. That way you don’t waste money on a degree that won’t help you or you don’t waste 3 years on the Sea Shepard only to find out that Not for Profit corporate accounting requires a $30k degree and $15k in certifications.
August 5th, 2010 at 9:44 am
What am I saving for my kid’s college? Nothing. First off, I have no “extra” income to save. I’ve had to stop funding my 401K since my last two were born, and medical bills combined with reduced hours for the wife make saving a non-priority (is there a better word for that?) Current priorities include catholic elementary school tuition, where the 12/15-1 student-teacher ratio kicks public school’s ass, and additional speech/special education services for my daughter to get her caught up with her age level (turning 3 in October). This spending will benefit my kids better in the long run than savings for possible college in the future.
When we get to the point where we will fund college, I know they won’t consider a parent’s 401K/retirement savings when figuring out financial aid, but they will figure in any college savings. So, I would be shooting myself in the foot if I’m not saving for retirement fully, when the future loans and grants are at stake.
I have a low opinion on the idea of using 2-year junior/community colleges as a “stepping stone” into a 4-year degree school. My experience is mostly with the private, liberal arts MIAC schools, and for the most part they won’t accept credits from community colleges. So, if that’s your plan, you will end up paying for credits and then paying for them again. I’ve taken several classes at Hennepin Tech, and let me tell you this: The kids right out of high school that treat the class as if it was still high school are the most annoying kids there.
Is internet education the key to the future? So far, I’ve haven’t seen anything different between that and old-style correspondence courses. Should we go back to that model? Mail me my PHD, baby!
August 5th, 2010 at 9:53 am
In Minnesota you’d be wrong. MnSCU community colleges have matriculation agreements with a lot of the privates in MN and the credits all transfer (as long as you’re talking college level and not 0-level courses–which are remedial). All MnSCU schools and UMN take MnSCU community college courses as well. Generally, even outside the matriculation agreements, the majority of four-year institutions will take credits from any other regionally accredited institution which all MnSCU community colleges are.
Full disclosure: I work for and take classes from an online institution.
As long as they are regionally accredited and carry additional specialized accreditations on top of that (CACREP, NCATE, whatever) I see no reason to doubt the viability of a degree from an online institution. If the accreditation bodies feel that the school is doing things correctly (and I’m talking regional accreditation from a body like the North Central Association of Colleges and Schools) then why shouldn’t you?
That said, there are degree programs which I must admit would be difficult to get online (such as those that require a lot of hands on work) but for many programs such as your typical liberal arts programs, I don’t see how reading books, doing research and submitting papers is any different when you’re physically present.
YMMV.
August 5th, 2010 at 10:59 am
As for trades being a better prospect than college, they’re not all doing so well right now either, particularly anything related to construction. There are plenty of plumbers, carpenters, masons, etc. with little or no work right now. Even trades not related to construction, such as auto repair, are impacted by the overall lower consumer and business spending.
I think the question of whether or not higher education is worth it is being made fuzzier by the bad economy and lack of jobs. It’s still an important question that needs to be asked, but you can’t just look at it in the context of the current economic situation.
Regarding the costs increasing, it’s just not sustainable, like any other bubble, and it’s going to stop or maybe even reverse at some point. When exactly that will be, though, is a good question.
August 5th, 2010 at 11:21 am
Regarding funding of savings for retirement and education… First Rule is to pay yourself. I dearly love my children, but each year I attempt to max out our Roth IRAs and put as much as possible into all the tax-deferred retirement savings (401k) first. If there’s anything left at the end of the year (there isn’t much if any for most households today for a one income family) then we’ll put something into the education (one single 529 plan for our two sons) fund.
Some people might say, “I care too much about my children and will save for their college first.” The problem is, your children aren’t going to save for your retirement and most of the time aren’t going to be able to support you when you’re old so you better put the funds away today. College loans are also some of the cheapest loans one will ever encounter in their entire life.
August 5th, 2010 at 12:18 pm
In terms of pure value, it would be hard to make the argument that a college degree is worth the cost, unless you were very frugal (as noted above – working and taking community college classes, etc) with your degree.
If the cost is $100,000 (not unreasonable today) and you are comparing future earnings, you also have to compare the original 100,000k. Kaiser noted that he has seen numbers that suggest an extra $750,000 in earnings for obtaining a college degree. How much would the 100,000 have earned if you had simply put it in an IRA and saved it until you retire? Add in 4 additional earning years (from 18 – 22) that are missed while in school, and you quickly have a case that college is actually a horrible choice.
Clearly this does not apply to everyone (we dont all have 100,000 laying around and end up borrowing it). But, I think the argument can be made, using real numbers, that if you have saved a big chunk of coin for your kids college, they might be far better off in the long run putting that money in a retirement account and getting a job. You could double down and put the money in a retirement account and they could join the Military.
August 6th, 2010 at 9:48 am
the funding issue is right, colleges assess student need supposedly based on 1/3 from student, 1/3 from parents, and 1/3 from other sources.
If you qualify for financial aid then the amount given will vary. if your family income and assets put you out of qualification then you get loans or you pay for it. It is right that college payment savings investment plans are probably not a good deal. Or for that matter is having your kids have accounts with any sizeable money in them.
If tuitions will go down I wonder when that will happen? Only if we have a serious depression. The reason is that now they are going up more as States are cutting spending on higher education thereby making colleges require higher tuition payments to offset the difference. In private colleges it is a bit different, their endowment portfolios are not what they were, and if they are small liberal arts colleges that are not high profile then they are losing students to public colleges or the military. Demand for getting into Harvard or Northwestern remains strong, but demand for getting into St Marys or Gustavus perhaps not so much.
Then there are the “for profit” schools like Capella or University of Phoenix… which also make matters interesting.
the best route is to find a profession that will have reasonable demand, things have changed in that respect in the past 2 years… nursing was once an insatiable demand industry… with hospitals in overhead control… that is no longer the situation.
i think the best option is to make sure your kid is left handed and start working on developing them into a lefthanded middle reliever with 3 good pitches.
August 6th, 2010 at 10:25 am
Mulch,
Left handed and breathing!
August 6th, 2010 at 11:05 am
Chad
dont get me started…
August 6th, 2010 at 1:18 pm
Yes, higher education is USUALLY worth it. I say “USUALLY” because it’s not valuable on its own. You have to add your own brains to whatever degree you get. Too many people think the degree will get them the job they want. Nothing could be further than the truth.
I have a history degree. I was intending to teach. 2.5 years in I changed my mind and decided I’d go to law school. I graduated undergrad in 3.5 years and never went to law school. I’m 4.5 years removed from my undergrad degree and make more than twice what I made in my first job out of college. I work in the technology sector and while many would argue I’m doing “nothing” with my history degree, my degree was necessary for every job, like it or not. My first job in politics connected me with a volunteer who worked in technology and referred me to his company. And while I was fortunate enough to receive several promotions in that company, I applied for and got my current job without any reference in the company. I got the job solely on my resume (well, and interview). The degree is really just a box that’s been checked and at this point, my work experience matters far more than the degree.
In regard to the $750,000 lifetime salary increase from a high school to a college degree, I have to wonder how much of that can really be attributed to the degree itself? It seems reasonable to assume that those who get a college degree tend to be more determined and driven than those who don’t. As a general demographic it would follow that those with college degrees would make more money, but there’s nothing to say it isn’t because they’re just more driven, degree or no degree. Sure, Bill Gates and Mark Zuckerberg are exceptions. But so is the founder of Kwik Trip, a guy who barely made it through 8th grade, and numerous other entrepreneurs. It’s also much easier to get into a small company without a degree. My old boss at my last job was in IT there and got his start with small companies. He’s now the IT Manager.
So if you have no desire to enter the corporate world or some profession requiring a degree (teaching, law, medicine, etc.), then I say forget about the degree and strike out on your own. But for many people, I think the degree makes sense.
August 6th, 2010 at 4:29 pm
Personally i think a degree is a good thing. I was exposed to alot of learning in college that really assisted me later. I have a graduate degree in History, but i never worked in that field, but the learning i got in history and the minor in English helped significantly in my current field of international business.
the caveats i continue to give are the 4 year education is not worth it unless you are in a field that is in high demand, or you are simply brilliant, …. and most importantly if you do not have to go into debt to get the degree it might be worth it. But incurring debt in the short term as we enter a deflationary cycle is not a good thing… normally one assumes educational debt is “good” debt as long as you consider your self an appreciating asset. But having debt in a deflationary situation is not good as every dollar you borrow has to be paid back in dollars that cost you more. Employment prospects are not good, assuming a net gain of 200,000 private jobs per month from now on we still go out to 2020 before we attain the jobs we lost since 2007.
i think that the up from the bootstraps entrepreneur definitely exists, but for most people that isnt going to be the ticket, hard work and ingenuity , karma and good timing usually go along with the success of such entrepreneurs… and they are the exception , not the rule.
perhaps the best method is to go to school , then work, then go back to school, or spend time working overseas, or join the military at some point …I meet alot of people who are successful that have that type of background. some of these people never finish their degree but become successful as Joey notes, the others get their degree and with the experience and learning they got from both school and work they become successful.
August 6th, 2010 at 10:25 pm
There are intangibles gained from four years in college – personal growth, networking opportunities, social/communications skills, etc. Not to mention the refining of spelling, grammar, and proof-reading skills. Very valuable.
Everyone should make an attempt to go to college early in life. I am currently embarking on my college experience at a very advanced time in my life, and it isn’t easy at my age. If gets harder the later you wait.
One mistake people make is to go to college to “train for a career”; they should instead look for personal enrichment and a rounded education and, if they’re lucky, a clue about a life direction – a passion.
August 7th, 2010 at 8:22 am
Sandy, of course we are all entitled to our own opinions, but the advice you give sounds like the perfect explanation of how kids leave school with 100K in debt and a degree in Art History……..which is fine, except then I have to listen to and read all about how they dont think they should actually have to pay back the loans, because they did not understand how much money they were borrowing, or they were not able to get the job they were “promised” or whatever.
Many of the same intangibles you mention could be gained from several other viable life alternatives following high school. The military, the Peace Corps, churches, community college, traveling, moving out of mom and dad’s house and getting a real job and becoming active in your community, etc.
August 7th, 2010 at 9:34 am
I think it’s interesting that we’re asking the question “What are alternatives to college?” rather than “How can college be made more affordable?”
After all, while it’s true that the U.S. has the best higher education institutions in the world (albeit mainly at the top tiers or in graduate programs), other countries have higher education institutions that are decent as well and don’t cost an arm and a leg to go to. I read an article that said Canada had an average higher education cost of 10K/year, and in a lot of European countries it’s even cheaper than that. Yes, part of that is from subsidies, but it’s also from keeping costs down and priorities focused where they should be.
August 7th, 2010 at 9:53 am
Tim,
According to this document (2010) Canada’s post-secondary funding is setup like this:
You can see the 2009 breakdowns for the US here: http://www.sheeo.org/finance/shef/SHEF_FY_2009.pdf and you’ll find that they are pretty similar aside from the fact that they are not breaking out “other income and philanthropic contributions” which I assume are being rolled into all state sources.
The subsidies are there for both but Canadian universities are just less money overall. However, we may be comparing oranges to apples here as I am not familiar with international admissions policies and how degrees granted in Canada are applied here in the job world or for graduate degrees.
August 7th, 2010 at 3:17 pm
Canadian universities are a great deal. McGill University in Montreal is on a par with some of the best private schools in the USA … but costs half as much. There are good schools in most of the provinces. I think at one time there was a reciprocity between Minnesota and Manitoba, but I am not sure that is still in place.
Costs: it has been proven that during the bubble years when kids and parents chased admission to the prestige schools that having a tuition that was lower than your peers was viewed by the university as a disadvantage. the hyping of “best college ratings” started by US News and World report magazine played into this. If School A was charging less than School B it implied School A was not of the same standard… so raise the cost… nonsense. So my feeling is that while inflation and pension liabilities and the cost of health care for staff and new buildings, etc. did add on cost… is that the cost of these tuitions went up just like the value of residential real estate. so maybe it will go back down much like housing has, but this only happens if there is too much inventory, we are starting to see a little of that in some schools, but the Ivies and places like Stanford and Northwestern or Washington Univ in St Louis are still charging over $50,000 per year and can get it.
The best value in 4 year colleges remains the state regional universities, like Winona and St Cloud or Moorhead. so much of what you get from a degree is what you put into it… and much of that doesnt matter where you do it.
I think the Big Ten schools are also good, we sent our daughter to the UW-Madison and she got a great education and loved her time there, and it was all on reciprocity tuition with Minnesota.
I dont disagree with Sandy, definitely pursue your passion, but remember it comes with a cost, and like Chad says, having $100,000 to debt serve is a massive anchor around one’s neck in a non expanding , deflationary economy.
August 7th, 2010 at 5:36 pm
Chad, I see that I wasn’t very clear. Pursuing career training often lands a student in a pool of other graduates all pursuing the same few jobs. For example, currently accounting degrees are supposedly going to land a lot of jobs in the near future. Many students, seeking good futures, will chase after accounting degrees regardless of where their talents and passions lie and the job market will be flooded with entry-level accounting grads for which there are not enough positions. It happened in the mid-eighties with computer programmers – I was there.
We’re all suited for different things and can all benefit from a well-rounded education which will help us to be flexible and prepared for the many turns and curves that life throws at us.
College is ridiculously expensive – no argument there.
August 7th, 2010 at 8:21 pm
http://money.cnn.com/galleries/2010/pf/1008/gallery.low_paying_college_degrees/index.html
August 8th, 2010 at 4:43 pm
During a phone interview the other day (I’m unemployed/looking for a job), the recruiter asked me “What did you learn from college?” (probably a standard question). I told her I graduated 25 years ago, and learned more from working with others than I ever learned in college!
And I got my transcripts the other day, wow, I was a bad student who majored in beer 101 and boys 201!
August 9th, 2010 at 1:34 pm
Celeste, it’s is interviews like that where I just tell them I’m not interested. It was a stupid question.
Apparently Bill Gates isn’t a fan of higher education:
http://www.dailytech.com/article.aspx?newsid=19294
August 9th, 2010 at 1:36 pm
He’s not a fan of traditional brick and mortar colleges. Please note the continual mention of “place-based” colleges.
August 9th, 2010 at 5:22 pm
Mikeh, that’s not necessarily a stupid question, and in fact refusing to answer probably makes people glad when you tell them you’re not interested.
I’ll sometimes ask seemingly random questions when interviewing people. I like to see how people react to unexpected questions that they haven’t been able to prep and rehearse to death.
It has very little to do with the literal answer to the question, it’s about the direction the candidate takes with the response. I think asking someone who graduated 25 years ago what they learned in college could elicit some very interesting conversation. Maybe they say the biggest thing they learned was how to calibrate a water bong. If they can segue that into why they are a good fit for the job at hand vs. someone that gives a lame, cliche answer about “I’ve learned more from people in life experiences than I did in college”…well, I consider that person likely more brilliant.
Example: My answer would be that, frankly, I learned very little of positive value in college. I gained almost no applicable skills or networking contacts. I’ve now had 20 years to reflect on what a wasted opportunity that was and it’s one of the inspirations for my work ethic, my character and integrity, and how I live and raise my kids today.
Back to the question at hand, I’m not sure anyone can say whether higher education is “worth it” definitively unless you are in a profession that requires the credentials (e.g. an MD or JD). I suppose there are things like teachers and nurses where it might be “worth it” based on the automatic jump in pay you get when you receive your master’s degree.
But Bill gets to the crux of it for me re: kids. I’m going to apply my experience with college and life in general to insist that WHATEVER route my kids choose, it is done with integrity, an honest effort, compassion, selflessness, passion, and a few other core values I hope to instill, as well as the values they develop on their own. I will not sit idly by and watch them complacently piss away their 20s like I did — whether that’s in college or a trade. It is my ONLY life regret to date.
Anything and everthing is “worth it anymore” if you make it that way.
August 12th, 2010 at 8:44 am
http://voices.washingtonpost.com/ezra-klein/2010/08/the_benefits_of_a_college_degr.html
November 10th, 2010 at 1:23 pm
http://articles.courant.com/2010-09-23/news/hc-ed-student-loan-debt-20100923_1_freeze-tuition-tuition-and-fees-state-tuition
May 18th, 2011 at 7:01 am
[...] people will be unable to find a job which will pay off their student debt leading people to wonder, is higher education really worth it? There are some fairly eye-opening statistics which show numbers of college grads working in jobs [...]