Is Higher Education Worth It?
September 13, 2011
Conventional wisdom is that college is expensive, but will pay off more in the end. However, people with a bachelor's degree may not see the same kind of success in today's economy as people saw 40 years ago, says Jenna Ashley Robinson of the John W. Pope Center for Higher Education.
According to one viewpoint stemming from a paper written by two authors at the Georgetown Center on Education and the Workforce, the United States needs more college graduates than it has now and there is a significant wage premium for those who graduate from college across all fields of work. However, those returns have been declining for more than 10 years, according to the U.S. Census Bureau.
- In 1991, for example, bachelor's degree holders were making 48 percent more than those with only a diploma.
- In 2001, recent college graduates' earnings were 68 percent higher than those of high school grads.
- By 2009, recent college graduates were earning just 54 percent more than high school grads.
- Median starting salary for bachelor's degree recipients in 2009 and 2010 was just $27,000, down from $30,000 in the years 2006 to 2008.
Something else reducing the net gain of degree holders is rising tuitions, rising student loan debt and joblessness.
- Tuitions have increased nearly 300 percent since 1990, rising from an average of $12,750 in 1996 to $24,000 in 2010, according to the Project on Student Debt.
- The student loan default rate has risen from 4.5 percent five years ago to 7 percent today.
- The jobless rate for college graduates under 25 is 3 percentage points less than for college graduates overall.
Even when the economy recovers, that will not guarantee future earnings for graduates. Because times are substantially different from that of the baby boomers, a serious question to consider is whether students should go to college at all.
Source: Jenna Ashley Robinson, "Is Higher Education Worth It? Or Is It The Next Big Bubble?" Investor's Business Daily, August 23, 2011.
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