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With the rising cost of a college education, it is more important than ever to take a close look at what you’re getting for your time and money. Just going to college because your parents did, because your high school counselor says so, or because your family wants you to be the first to graduate with a college degree are not good enough reasons. Consider your strengths, weaknesses, likes, dislikes, career goals and overall commitment to getting a college education. These, in addition to many other factors, play a significant role in making a solid decision that can chart your course for many years to come in both your profession and your finances. In addition to the following considerations, James Altucher’s “The Pros And Cons of Going to College” is an insightful article on this topic that is well worth your time. He is comical, candid and brutally honest.

PROS

Graduates Make More Money

As of April 2013, the difference in earning potential between a high school graduate and someone with a bachelor’s degree was roughly $30k more per year. That’s about $500k over the course of a lifetime. The lifetime difference with an Associates is approximately $170k.

Source: Michael Greenstone and Adam Looney, “Where Is the Best Place to Invest $102,000—In Stocks, Bonds, or a College Degree?,” www.hamiltonproject.org, June 25, 2011

More Jobs Require a College Degree

Georgetown University projects that 63% of all jobs will require some college education by 2018.

  Source: Anthony P. Carnevale, Nicole Smith, Jeff Strohl, “Help Wanted: Projections of Jobs and Education Requirements through 2018,” www.georgetown.edu, June 2010

Better Opportunity and More Jobs

The unemployment rates in April  2013 was:

  • 3.6% for college graduates with a bachelor’s degree
  • 5.0% for college graduates with an associate’s degree
  • 7.5% for high school graduates
  • 11.4% for those who dropped out of high school

College graduates were also more likely to receive on the job training and access to technology.

  Source: Anthony P. Carnevale, Nicole Smith, Jeff Strohl, “Help Wanted: Projections of Jobs and Education Requirements through 2018,” www.georgetown.edu, June 2010

Health Insurance and Retirement

Access to employer provided health insurance:

  • 70% for college grads
  • 50% for high school grads

Access to retirement plans:

  • 70% of college grads over 25
  • 65% for those with associate’s degrees
  • 55% for high school grads
  • 30% for those who dropped out of high school

Sources: (Insurance) Marcelina Hardy, “7 Benefits of Earning a College Degree,” www.education.yahoo.net, 2013 (Retirement) Sandy Baum, Jennifer Ma, and Kathleen Pays, “Education Pays 2010: The Benefits of Higher Education for Individuals and Society,” www.collegeboard.com, 2010

Learn Soft Skills

College can provide opportunity for interacting the faculty and students which can certainly be of value in the workplace. Learning effective communication, cultural sensitivity, social norms, working in teams and taking on leadership roles are just a few of the soft skills that can be learned in a college environment.  

Source: Cooperative Institutional Research Program, “1994 Nine Year Follow-Up Survey (of 1985 Freshmen),” Higher Education Research Institute at UCLA, 1995

Live Longer

Due in part to leading healthier lives, on average, college grads live six years longer than high school grads.  

Sources: Robert A. Hummer and Elaine M. Hernandez, “The Effect of Educational Attainment on Adult Mortality in the U.S.,” www.prb.org, July 2013 and Brian L. Rostron, John L. Boies, and Elizabeth Arias, “Education Reporting; Classification on Death Certificates in the United States,” Vital and Health Statistics, www.cdc.gov, May 2010

Lower Poverty Rates

The 2008 poverty rate for college graduates was 4% compared to 12% for high school graduates.

  Source: Sandy Baum, Jennifer Ma, and Kathleen Pays, “Education Pays 2010: The Benefits of Higher Education for Individuals and Society,” www.collegeboard.com, 2010

CONS

Student Loan Debt

Student loan debt for 25 year olds increased from 25% to 43% from 2003 to 2012. The average loan balance increased 91% during the same time frame to an average of $20,326. 10% of students graduate with over $40,000 in debt with 1% over $100,000.

  Sources: Meta Brown and Sydnee Caldwell, “Young Student Loan Borrowers Retreat from Housing and Auto Markets,” www.libertystreeteconomics.newyorkfed.org, Apr. 17, 2013 and Chris Denhart, “How the $1.2 Trillion College Debt Crisis Is Crippling Students, Parents and the Economy,” www.forbes.com, Aug. 7, 2013

Live With Parents, Delay Marriage

In 1960, 77% of women and 65% of men had finished school, moved out of their parents’ homes, were financially independent, getting married and having children. Compared to 2013, the numbers for student loan borrowers look much more dismal at 50% of women and only 30% of men “transitioning to adulthood”.

  Source: Robin Marantz Henig, “What Is It about 20-Somethings?,” www.nytimes.com, Aug, 18, 2010

Grads in Jobs - No Degree Required

In 2008 the Department of Labor stated that 17 million college grads were in jobs that did not require a college degree. In 2012, one in three college grads were in jobs that required a high school diploma or less! Here are some startling statistics from 2012:

  • 16,000 parking lot attendants are college graduates
  • 83,000 bartenders are college graduates
  • 115,000 janitors are college graduates
  • 15% of all cab drivers have bachelor’s degrees

And the grads that work in positions that don’t require a college degree earn 30-40% less than their counterparts.

 

Sources: Richard Vedder, “Twelve Inconvenient Truths about Higher Education,” www.theccap.org, Mar. 2012 and Richard Vedder, “Going to College Is a Mistake for Many,” www.usnews.com, Nov. 17, 2011 and Andrew Sum, “The Nation’s Recent College Graduates Face Significant Labor Market Problems,””www.huffingtonpost.com, Oct. 19, 2010

Unemployed or Underemployed

If you were a college graduate under 25 in 2011, there was a 50% chance you were unemployed or working in a part-time position. Take a look at these unemployment rates for college graduates:

  • 5.7%       2007
  • 10.4%     2010
  •  8.8%      February 2013

For the class of 2013, the underemployment rate for college graduates was a staggering 18.3% and in 2012 the Federal Reserve Bank of New York said that 44% of recent college grads were underemployed.

  Sources: Amanda M. Fairbanks, “2011 College Grads Moving Home, Saddled with Historic Levels of Student Loan Debt,” www.huffingtonpost.com, May 13, 2011 and Heidi Shierholz, Natalie Sabadish, and Nicholas Finio, “The Class of 2013: Young Graduates Still Face Dim Job Prospects,” www.epi.org, Apr. 10, 2013 and Jordan Weissmann, “44% of Young College Grads Are Underemployed (and That’s Good News),” www.theatlantic.com, June 28, 2013

Success Without a College Degree

The Bureau of Labor Statistics states that of the 30 fastest growing jobs between 2010 and 2020:

  • 5 of them don’t require a high school diploma
  • 9 of them require a high school diploma
  • 4 require an associate’s degree
  • 6 require a bachelor’s degree
  • 6 require a graduate degree

Source: Bureau of Labor Statistics, “Fastest Growing Occupations, 2010 and Projected 2020,” www.bls.gov, Jan. 2012

Retiring with Student Debt

Oftentimes students cannot receive student loans without the parent or grandparent co-signing.  6.9 million student loan borrowers were over the age of 50 in 2012. The average balances on those loans were between $19521 and$23,820. 27% of those Senior Citizens were 90 days past due in their payments and 119,000 of them were having their Social Security checks garnished by Uncle Sam.

  Sources: Federal Reserve Bank of New York, “Student Loan Debt by Age Group,” www.newyorkfed.org, Mar. 29, 2013 and Tamar Lewin, “Child’s Education, but Parents’ Crushing Loans,” www.nytimes.com, Nov. 11, 2012

A Trade Could Be Better

A survey performed in 2011 by Pew Research indicated that 57% of Americans felt the quality of education received in college wasn’t worth the money spent. Perhaps one of the reasons is that in 2011, 35% of students enrolled in college studied 5 hours or less per week.

  • After 4 years of college, 36% of students showed no improvement on Collegiate Learning Assessments
  • 56% of employers feel that half or even less of college graduates have the skills and knowledge to promote within their companies
  • 30% of graduates felt that their college experience did not prepare them for the workplace

Sources: Pew Research, “Is College Worth It?,” www.pewsocialtrends.org, May 15, 2011; Craig Brandon, “With College, Only the Motivated Need Apply,” www.usnews.com, Nov. 17, 2011; NPR, “A Lack of Rigor Leaves Students ‘Adrift’ in College,” www.npr.org, Feb. 9, 2011; Hart Research Associates, “It Takes More than a Major: Employer Priorities for College Learning and Student Success,” www.aacu.org, Apr. 10, 2013

This post is a summary of a more detailed discussion that can be found in an article entitled “Is a College Education Worth It?” at ProCon.org.

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