Sunday, May 22, 2016

The Value of a College Degree and the Dangers of Debt

While growing up, most of us were told the familiar but incorrect tale that 'if we get that college degree, we can write our own ticket. And college is a great investment, regardless of the cost, aka debt incurred, in getting that degree.'

Or if not that exact story, at least we were told some version thereof.

As an oldster who is both a college and law school graduate who successfully served as CEO of several companies for several decades, let me tell you the truth in plain language. That 'graduate at all costs and you can write your own ticket stuff' is a myth.

Now that is not to say that a college degree isn't helpful in landing that first full time job. But it's no guarantee of either job or financial success.

Instead it's best to think of that college degree as a minimum qualifier or condition precedent (an event or state of affairs that is required before something else occurs -- such as first the degree, then the job) to getting many jobs. Because without the degree, you may not even be considered for the job sought. So by all means, get that degree and start down the road to career success.

But it's not the finish line --- it's actually nothing more than the starting line. Thereafter what happens is largely up to you, how hard you work, how you relate to people, and how well you perform on the job.

All that said, today's graduates won't have it so easy in this slow growth and highly competitive debt ridden global economy. So here's my advice --- work hard to prepare for college, work hard while in college, stay away from expensive schools, don't borrow money, and get part time and summer jobs while in college.

Doing those simple things will make a huuuuuuge difference when it comes to 'ticket writing.'

Still, it's much tougher out there today than when I started. How tough is it?

The Broken Bargain With College Graduates has this to say:

"In his recent commencement address at Rutgers University, President Obama focused on the noneconomic reasons for going to college. . . .

It was an important reminder, well suited to the times and the occasion. But it also came across as if the economic benefits of college were a given. In fact, the familiar assumption — graduate from college and prosperity will follow — has been disproved in this century. College-educated workers have not seen meaningful pay raises, and public policy has failed to address the stagnation.

It is true that as a group college graduates make more than high school graduates. . . . Since 2002, however, inflation-adjusted pay for college graduates has risen a measly 64 cents an hour .... That’s surely better than the 49-cents-an-hour drop for high school-educated workers in the same period .... But standing still while others regress is no cause for celebration.

The problem is that the economy does not produce enough jobs that require college degrees. Private-sector white-collar jobs can increasingly be moved offshore and automated, while public-sector jobs that require degrees, notably teaching, have been decimated by deep layoffs and feeble hiring.... One sign of the downshift is that much of the recent job growth has been in lower-paying occupations. Worse, there is little evidence of a turnaround. . . .

The result is lower-quality jobs and lower pay for college graduates. Take, for example, the roughly one-third of college graduates who spend their work lives in jobs that do not require a degree. In 2000, 55 percent of them made at least $45,000 a year. In 2015, only 44 percent were in jobs that paid that much."

Summing Up

Technology, globalization and immigration are huuuuuuge issues facing today's work force, including our college graduates.

And for the foreseeable future, good jobs will be all too scarce for those graduating from college.

They'll be even tougher to get for those without a college degree.

And whatever else today's high school and college graduates decide to do, unnecessary debt obligations should be avoided.
That's my take.

Thanks. Bob.

No comments:

Post a Comment