In my view, the correct answer to whether a college education is a good investment is often a complicated one. Its value very much depends on what we learn while in college, whether we graduate, and how much it costs us to get that degree, both in time and money. Finally, is it necessary to prepare or credential us for what it is that we want to pursue as our life's work?
As a college graduate, I can attest to the fact that not all that much work or worthwhile learning is necessary to attain a degree. It's pretty much an endurance contest.
That said, getting "credentialed" properly is necessary for many types of positions, and learning is available to those who make the effort. Accordingly, the individual would-be student is best able to judge for himself whether a college education is important.
In any case, there is now growing evidence that a two year community college associates degree is not only both cheaper and less time consuming to secure than a four year degree, but it's also often worth considerably more in the marketplace. That fact alone should be enough to make more of our young people think things through a little more carefully before jumping on the college bandwagon.
The Diploma's Vanishing Value is subtitled 'Bachelor's degrees may not be worth it, but community college can bring a strong return:'
"May 1 is fast approaching, and with it the deadline for high-school seniors to commit to a college. At kitchen tables across the country, anxious students and their parents are asking: Does it really matter where I go to school?
When it comes to lifetime earnings, we've been told, a bachelor's degree pays
off six times more than a high-school diploma. The credential is all that
matters, not where it's from—a view now widely accepted. That's one reason why
college enrollment jumped by a third last decade and why for-profit schools that
make getting a diploma ultraconvenient now enroll 1 in 10 college students. But
is it true that all colleges sprinkle their graduates with the same magic dust?
With unemployment among college graduates at historic highs and outstanding student-loan debt at $1 trillion, the question families should be asking is whether it's worth borrowing tens of thousands of dollars for a degree from Podunk U. if it's just a ticket to a barista's job at Starbucks. When it comes to calculating the return on your investment, where you go to school does matter to your bank account later in life.
Not surprisingly, research has found that a degree from a name-brand elite college, whether it's Harvard, Stanford or Amherst, carries a premium for earnings. But the 50 wealthiest and most selective colleges and universities in the U.S. enroll less than 4% of students. For everyone else, the statistics show that choosing just any college, at any cost for a credential, may no longer be worth it. . . .
Think a community-college degree is worth less than a credential from a four-year college? In Tennessee, the average first-year salaries of graduates with a two-year degree are $1,000 higher than those with a bachelor's degree. Technical degree holders from the state's community colleges often earn more their first year out than those who studied the same field at a four-year university.
Take graduates in health professions from Dyersburg State Community College. They not only finish two years earlier than their counterparts at the University of Tennessee at Knoxville, but they also earn $5,300 more, on average, in their first year after graduation.
In Virginia, graduates with technical degrees from community colleges make $20,000 more in the first year after college than do graduates in several fields who get bachelor's degrees. Yet high-school seniors are regularly told that community colleges are for students who can't hack it on a four-year campus.
That's how Tom Carey landed at Radford University in Virginia as a business major, though his real love was working on cars. "There was definitely pressure" to go to a four-year school, he told me. "I had no interest in whatever degree I was getting at Radford."
After two years, Mr. Carey, who is from Reston, transferred to be closer to home and enrolled in the automotive-technology program at Northern Virginia Community College. He is now working at a Cadillac dealership and outearns business graduates from Radford's undergraduate program by several thousand dollars. That small difference grows considerably when you take into account that a community-college degree is a fraction of the cost of a bachelor's degree and that these students enter the workforce two years earlier.
Even if Mr. Carey had stayed at Radford, graduates of the undergraduate business administration program there make an average $10,000 less their first year after graduation than those from George Mason University, though both schools charge about the same in tuition.
Given these differences in postgraduate earnings, the size of your student loan is not the only number you should worry about when weighing the college decision. Will you make enough to pay off your loan? What are your chances of graduating on time?
In recent months, two tools have been released that allow families to better compare colleges with respect to return on investment. The U.S. Education Department's College Scorecard website helps you figure out where to get "the most bang for your educational buck" by compiling federal data collected from colleges. Collegerealitycheck.com from the Chronicle of Higher Education allows for quick and easy comparisons between colleges on measures families should weigh during their search. It includes early-career salaries for college graduates from payscale.com, which are self-reported by users of the site.
Colleges don't like being measured by the earnings of their graduates. Defining value in such a narrow way, they argue, obscures the broader benefits of higher education. They point out that first-year salaries often have no bearing on earnings later in life. It's true that those with bachelor's degrees typically earn more over a lifetime than those with a two-year degree, but that's little consolation to those who are discouraged from going to community colleges and end up dropping out of a four-year school without a degree. . . .
For decades, U.S. colleges have promoted the economic benefits of higher education. But now that they can no longer ride the coattails of the national averages—which obscure the value of individual schools and make everyone look good—higher-education leaders suddenly think salary is too narrow a measure.
Students who pick their major based solely on postgraduation salaries, as opposed to passion for a field, will in all likelihood struggle in both school and career. But without salary information, many more students will make bad choices. They will go deep into debt without ever knowing that they pursued a degree without a chance at a career or a job to pay off their loans."
Summing Up
As my parents used to tell me, death and taxes are the only two sure things in life.
So that's about all I really know for sure.
However, I believe that some things we choose to do because we enjoy doing them are much more likely to work out to our long term enjoyment, fulfillment and financial advantage than other choices will.
The best way to be prepared to do anything is to acquire the appropriate knowledge, skills and training concerning what it is that we're learning to do.
Today the unaffordable burden of student loans and the difficulty of getting a good job make the college decision a difficult one for many of our young people. Accordingly, it's important that the prospective student (and his family) looks before leaping and that if he does decide to attend college, that he has first resolved to make the effort to graduate in a timely and cost effective manner with a degree that has considerable value in the job market.
So when considering college, think it over carefully. The decision to go or not go, and then to graduate or not graduate, what degree to pursue, and how many, if any, student loans to assume is a biggie.
The decision is a 'game changer,' in other words.
That's my take.
Thanks. Bob.
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