Today more and more people are critically looking at the cost of a four-year degree and wondering if it’s worth it.
In early June, Richard Vetter and Justin Strehle wrote an article for the Wall Street Journal entitled “The Diminishing Returns of a College Degree.” The article starts by saying in 1775, only 721 students attended the nine colonial colleges. By 2010 the number had surpassed 20 million.
Yet, according to the national student clearinghouse, between 2011 to 2016, total enrollments had declined from 20.6 million to 19 million. Speculation is that it may be the result of the Great Recession or the drop in birth rates, but it could be the cost of college attendance versus the financial benefits.
From 2000 to 2016, annual costs rose 3.54 percent to 74.5 percent overall. American families have borrowed $1.4 trillion to cover these costs. That is more than all credit card and car loans combined.
Less well known is the real-earnings difference between a high school diploma and a bachelor’s degree. Census Data show that the average annual earnings differential between high school and four-year college graduates rose sharply to $33,900 in 2000, expressed in 2015 dollars from $19,776 in 1975 only to fall to $29,867 by 2015.
The New York Federal Reserve Bank reported that about 40 percent of college graduates are “underemployed.” Many are Uber drivers or work in restaurants.
Also, adding to the mix is the reality that not all schools and majors are the same. The authors point out that attendees at Stanford University earn on average far more than those attending Northern Kentucky University – from $86,000 versus $36,000. Electrical engineers earn far more than psychology majors.
On the race and gender side, they found that male college graduates earning power has decreased, as it has for whites and Asians. Not so for women, Hispanics and blacks.
To employers, a candidate with a bachelor’s degree has always seemed brighter and more disciplined than someone with only a high school degree. But the authors question how does knowing a lot about Anthropology make your more productive?
The answer for the most individual is – if you start college, you must finish. Those who start but don’t finish are in real trouble given the debt load. College councils need to be honest and frank about which degrees will provide a living wage and which ones will not.
If you purchase a car or take out a bank loan, the fees and costs must be displayed to you. Why not do the same thing with college majors?
If this were done, it would eliminate a lot of future pain. Schools also should be responsible for helping you get a job not just taking your money. The debate is on and may eliminate phony degree programs.