It’s important to emphasize these shortfalls because public discussion today — for which we in the news media deserve some responsibility — often focuses on the undeniable fact that a bachelor’s degree does not guarantee success. But of course it doesn’t. Nothing guarantees success, especially after 15 years of disappointing economic growth and rising inequality.
When experts and journalists spend so much time talking about the limitations of education, they almost certainly are discouraging some teenagers from going to college and some adults from going back to earn degrees. (Those same experts and journalists are sending their own children to college and often obsessing over which one.) The decision not to attend college for fear that it’s a bad deal is among the most economically irrational decisions anybody could make in 2014.
The much-discussed cost of college doesn’t change this fact. According to a paper by Mr. Autor published Thursday in the journal Science, the true cost of a college degree is about negative $500,000. That’s right: Over the long run, college is cheaper than free. Not going to college will cost you about half a million dollars.
Mr. Autor’s paper — building on work by the economists Christopher Avery and Sarah Turner — arrives at that figure first by calculating the very real cost of tuition and fees. This amount is then subtracted from the lifetime gap between the earnings of college graduates and high school graduates. After adjusting for inflation and the time value of money, the net cost of college is negative $500,000, roughly double what it was three decades ago.
This calculation is necessarily imprecise, because it can’t control for any pre-existing differences between college graduates and nongraduates — differences that would exist regardless of schooling. Yet other research, comparing otherwise similar people who did and did not graduate from college, has also found that education brings a huge return.
In a similar vein, the new Economic Policy Institute numbers show that the benefits of college don’t go just to graduates of elite colleges, who typically go on to to earn graduate degrees. The wage gap between people with only a bachelor’s degree and people without such a degree has also kept rising.
Tellingly, though, the wage premium for people who have attended college without earning a bachelor’s degree — a group that includes community-college graduates — has not been rising. The big economic returns go to people with four-year degrees. Those returns underscore the importance of efforts to reduce the college dropout rate, such as those at the University of Texas, which Paul Tough described in a recent Times Magazine article.
But what about all those alarming stories you hear about indebted, jobless college graduates?
The anecdotes may be real, yet the conventional wisdom often exaggerates the problem. Among four-year college graduates who took out loans, average debt is about $25,000, a sum that is a tiny fraction of the economic benefits of college. (My own student debt, as it happens, was almost identical to this figure, in inflation-adjusted terms.) And the unemployment rate in April for people between 25 and 34 years old with a bachelor’s degree was a mere 3 percent.
I find the data from the Economic Policy Institute especially telling because the institute — a left-leaning research group — makes a point of arguing that education is not the solution to all of the economy’s problems. That is important, too. College graduates, like almost everyone else, are suffering from the economy’s weak growth and from the disproportionate share of this growth flowing to the very richest households.
The average hourly wage for college graduates has risen only 1 percent over the last decade, to about $32.60. The pay gap has grown mostly because the average wage for everyone else has fallen — 5 percent, to about $16.50. “To me, the picture is people in almost every kind of job not being able to see their wages grow,” Lawrence Mishel, the institute’s president, told me. “Wage growth essentially stopped in 2002.”
From the country’s perspective, education can be only part of the solution to our economic problems. We also need to find other means for lifting living standards — not to mention ways to provide good jobs for people without college degrees.
But from almost any individual’s perspective, college is a no-brainer. It’s the most reliable ticket to the middle class and beyond. Those who question the value of college tend to be those with the luxury of knowing their own children will be able to attend it.
Not so many decades ago, high school was considered the frontier of education. Some people even argued that it was a waste to encourage Americans from humble backgrounds to spend four years of life attending high school. Today, obviously, the notion that everyone should attend 13 years of school is indisputable.
But there is nothing magical about 13 years of education. As the economy becomes more technologically complex, the amount of education that people need will rise. At some point, 15 years or 17 years of education will make more sense as a universal goal.
That point, in fact, has already arrived.Continue reading the main story
The growing problem of student loan debt has dominated national news for several years. Over 70% of students graduating with four-year degrees in 2014 left college in debt, and the amount of that debt is substantial. The average student loan debt, as of 2014 is $30,000. Given the fact that a college degree consumes four to five years of a young person's life (which might be spent working), ends with a substantial bill that must be paid, and does not guarantee lucrative employment immediately upon graduation has led many to question the value of a college degree in the first place. Despite these challenges, however, current research shows that, without question, there are significant and substantial benefits to earning a college degree. The three main categories of these benefits include:
- Career/Economic Benefits
- Social/Emotional Benefits
- Health/Welfare/Quality of Life Benefits
Career and Economic Benefits of a College Education
The benefits of a college education impact almost every aspect of a person's professional life. Some of the measurable benefits include:
- Higher income
- Lower unemployment
- Greater job satisfaction
According the U.S. Census Bureau, those with bachelor's degree enjoy a median income twice that of those with only a high school diploma. That is a significant difference that can affect a person for their entire working life, and into retirement. In fact, a study of the most recent Census report suggests that the single most important factor in determining a person's income is his or her education. Choosing to forego a college education is a choice that will have life-long implications. While the burden of college debt is real, it is also finite; it lasts for a relatively short period of time. The burden of a lack of education has a life-long effect on one's standard of living. College education also teaches financial responsibility when the student has to make hard financial choices and learn to save money to buy lunch from the college canteen or that cool college backpack.
That is not to say that all four-year degrees lead to the same income levels. In 2015, the highest paid graduates left college with degrees in the following disciplines:
- Computer sciences
Those with the lowest income potential are the fields one might expect, fields that are associated with the arts and service, but are not fields students typically pursue with a goal of quickly accumulating wealth. Those degrees include:
- Art and drama
- Religious studies and pastoral ministry
- Early childhood and music education
Want to share this on your site? Just copy the code below!
Even when one chooses a field that is not particularly lucrative, there are still many career benefits with a college degree. People with a bachelor's degree in any field are much less likely to be unemployed, and when they are unemployed, they find new jobs much more quickly than those with only a high school diploma.
In 2014 the unemployment rate for people with only a high school education was 6%, while it was just 3.5% for those with a bachelor's degree, and less than 3% for those holding a master's degree. In effect, someone who has not graduated from college is twice as likely to be unemployed as someone who has. The difference is even more pronounced for African Americans. About 8% of African-Americans with high school diplomas are unemployed, but only 2.8% of those with college degrees face the same challenge.
Greater Job Satisfaction:
While income is an important factor in career satisfaction, it is not the only factor. Those with bachelor's degree tend to be more satisfied with their jobs in general, based on several different criteria; 53% of people with a bachelor's degree report they are "very satisfied" with their current jobs, compared to 37% of people with a high school diploma. College graduates also have more autonomy in their work. They are more likely to hold positions that allow them to make independent decisions and use their skills and experience to choose solutions to work-related problems. In contrast, those with only a high school diploma typically rely on others to determine what work they will do, when they will do it, and how work-related problems will be solved. The result is that those who have more opportunity to engage with their work are far more satisfied with that work.
The Social/Emotional Benefits of a College Education
College is more than classes, papers, and exams. It is also a meaningful social experience, where people develop friendships and long-term relationships. People who don't attend college miss out on several important experiences that, like income potential, have lifelong implications.
College offers young people the opportunity to live, work, and socialize within a contained society made up almost exclusively of people their age. They share experiences and develop close personal relationships. Almost 30% of Americans report meeting their future spouses in college. Not all of these marriages began with college relationships, but they did find a spark in a friendship developed on campus. Even though the cliché of the "high school sweethearts" is still well known, in fact, only 15% of Americans marry someone with whom they had a relationship in high school.
Finding a spouse is not the only social/emotional benefit of a college education. College educated Americans, according to several studies:
- Are more self-confident in social situations
- Are more effective communicators
- Have more friends
- Suffer less frequently from anxiety
- Have higher self-esteem
- Are more likely to believe they have control over their own lives
The Confidence of the College Graduate
A 2008 dissertation study from the University of Michigan tracked the success of a cohort, or large class-year group of students. The study showed that all students faced challenges in adjusting to college life. Those challenges included the mundane details of life, such as laundry, meals, and managing mild illnesses and minor injuries, to more complex problems such as financial problems, conflicts with friends and family, and seeking support for emotional and learning disabilities. The studied found that those students who successfully managed these challenges garnered many advantages over those who were unable to adjust and eventually left school.
Facing, managing, and overcoming challenges, not in a protected vacuum, but within an environment that also demands performance in the classroom gives students confidence. They learn that they can take steps to control their own lives, and they develop strategies that make them more resilient to challenges. As a result, they have a more positive self-image, are more confident about their choices, and are comfortable interacting in groups and engaging in personal sharing necessary to build friendships. These attributes continue after college and into students' careers and adult lives and relationships.
Health/ Quality of Life Benefits
Making a good living, being confident, and having strong personal relationships are all important benefits. They are not the only benefits of a college education. The experience of attending and completing college, for a host of reasons, leads to greater health and a higher quality of life than are experienced by those with only high school diplomas.
College Graduates are Healthier
College graduates enjoy higher incomes, as noted above. Along with that higher income, they are more likely to have comprehensive health insurance. Access to health care is an important factor in one's overall health. Regular check-ups, comprehension evaluations of symptoms, and rapid response to illness means that college graduates have a higher life expectancy, because they are more likely to seek and receive treatments for conditions before they become serious. In addition, college graduates are far less likely to smoke. According to the Centers for Disease Control (CDC), 22% of those with high school diplomas smoke, compared to only 9% of those with bachelor's degrees. Non-smokers experience a greater life expectancy than smokers.
Quality of Life Benefits
While a college degree does not guarantee leisure time, frequent vacations, or opportunities to engage within one's community, it is indisputable that college graduates are more likely to enjoy these amenities of a high quality of life than those who have not finished college. In addition, and perhaps more importantly, the children of college graduates are the beneficiaries of a high quality of life, as demonstrated by the following. When compared to the children of high school graduates, children of college graduates:
- Are more likely to have annual physicals and comprehensive healthcare.
- Spend more time with their parents
- Are more likely to be involved in extra-curricular activities including sports, clubs, and the arts,
- Are more likely to have college funds, put aside by their parents, available for their own educations.
A college education can be expensive. The specter of college loan debt is, without a doubt, daunting. But, a college education offers lifelong benefits, from higher income, to better health, to a better life for one's children. Some of these benefits can be compared dollar for dollar with the cost of an education, but others, like healthy children, self-confidence, and a longer life, are priceless. Is college worth the cost? Absolutely.
Follow Piyush Mangukiya on Twitter: www.twitter.com/AcerPiyush