Is a college degree worth it?
Pretty straight-forward question it is that if a college degree is really worth the time and money or not for the new youths. But who are the people that ask this question? Future students? The students who already graduated? The guardians? The marketing team of the college degree program? The employers? College dropout millionaires? Tech moguls who are good at fortune-telling? Or someone who is running for the President? The answer could vary to all the persons that ask. This is because all the different people ask the same question from different viewpoints.
“There will be fewer jobs in the future. The type of jobs will not be the same as now. Robots will replace your job.” “You can make more money in real estate if you drop out of college, see, the Nobel laureate in Economics sometimes don’t bag that much” “Most schools don’t even touch upon the real world experience, it’s always the company’s money to invest in employees’ training program.” “Data suggests that an average college graduate makes 60% more money than a high school graduate.” “Data is the future, the average salary for a data scientist is $131,821 per year in the United States.” “Not even getting a paycheck hike but still college debt is eating away my monthly salary.” “College graduates are less prone to drug addiction, they are the driver of our nation.”
Tuition-free college degree should be mandatory to push more kids to college. But wait, why the other group of people are saying, it will rather devalue the degree program. These people come up with the “luxury vs necessity” or “job vs career” theory to address this issue.
Just a second, even some of the future students flocking for free education are worried that they will have hard time asking for a better paycheck because all of them will have a college degree.
It’s no more a new subject to be startled by this topic of supply and demand of college graduates because these things are always discussed from time to time. In the Journal of Human Resources in 1967, Mr. Folger published an article titled “The Balance between Supply and Demand for College Graduates” where he discussed about the need for the highly educated individuals in the US economy and projected trends on the demand for Bachelor’s and Doctoral graduates based on the number and type of jobs. Well, this is pretty much the same thing we are discussing now in 2018 too. This could be a lengthy but a good article to read: “Recovery: Projections of Jobs and Education Requirements Through 2020“, published by Georgetown University .
Value of a College Degree Based on
Out-of state tuition fee for a public-four-year college is $23,890 and for private, it is $32,410 (focusing on North American college stats & trends only). These numbers vary a lot from state to state, year after year and even based on study majors too. In the last decade, the annual cost of public school increased by 6.5%. If college tuition is to blame for the reason of calling it worthless, then for now, let’s suppose, college degree is free for all. You get a free college education and you are ready to start joining a company. In this scenario, as per the company’s structure, there are managers of different levels like a pyramid. Now, this could be a problem to promote one employee over the other. Promotion in a company is like a reward system. If you and your friends are both having the same Electrical engineering degree and same work experience, who will be given more preference over the other. This is so hard to judge but yes, performance at work will be first considered. But if you are burning the midnight oil to finish an MBA, you could be well positioned for a promotion. Do you think your friend will also copycat you and do the same? At this point, let’s take it for granted that an MBA is free. Do you think that the extra pain you took to complete the MBA, your friend will do the same? Most likely not. Let’s trim these degrees. Let’s say, 4-years Electrical engineering degree you and your friends got, are as if high school diploma or some associates degree, and consider the MBA as a college degree. Now, if you consider the company promotion is because of the MBA, and MBA was because of your taking extra pain to complete it. Keeping the tuition cost free, your promotion is directly proportional to the extra pain you took to graduate. Now, a college degree is valuable, right? Therefore, it’s not always tuition to blame for calculating the value of a college degree.
Although, this will be a bad analogy to draw for the free and paid college degree comparison, let’s talk about it anyway. Some students in Europe would say, they have free college education. If an American student says what the heck is this, I will have to pay for public restroom in Europe? The point is, money has to come from somewhere. If all the American colleges start offering tuition-free degrees, there will be more taxes once a student joins a company or somehow the equation has to match. Left hand side = Right hand side.
Value of a College Degree Based on
Credit score is something which is important for all people: banker, employer, creditors, and lenders. Let’s say, you need to pay to go to college. Based on the major of study you choose, the tuition fee will probably vary. Medical, law, computer science or marketing degrees are considered as expensive or sometimes it depends on the university you go to. If you go to a bank for an educational loan for a college degree, you can most likely secure it (having a scholarship in hand makes it much easier). Next part is how you are managing your finances and that’s how you build your credit score.
One survey finds that the higher the educational level, the higher the earnings ratio. In another article, there is a good summary of credit score vs. college degree. It is concluded that recent grads and current grads have the lowest credit score compared to the students graduated a while ago. There are also some interesting data on how the amount of auto and home loan varies from a major of study and degree level.
Overall, it is understood that a college degree costs a lot and puts a student in a higher debt but also pays off after some certain time once they graduate. So, a college is not completely worthless, right?
Value of a College Degree Based on
We know what you are thinking. Such a bogus point, right? Let us walk you through this in a very different approach. It is not intended to hurt anybody’s feeling here but to discuss it.
Here is the question:
If the college degree is worthless, what is the chance that we would observe the recent growth in experience economy? Let’s start with the null hypothesis that this college-life experience has no value. You can run this based on any random sample of graduated students or a mixture of graduated and current students.
Here are some links that can help:
Hopefully, you will get the answer that it’s not only the paper certificate or digital certificate that a college degree has to offer.
There are other points that could have been added too, such as free networking or consultation, free dating, free gym, free outdoor activities or renting free bikes & kayaks, sometimes free food. There are some free stuffs that we are including here, would not have been possible if tuition goes free. Remember, you need to pay for dating apps to find love (the total expenditure will come with the dating app fee + time spent to find + fear of meeting an alien creature which has no college tag) !
If you are thinking free networking is utter nonsense, then this is how it could be explained easily. Let’s say, you never applied to any college and you friend applied to Stanford University and dropped out on the very first day of joining. You both are working on two different startups. Now if it is to get a funding from angels and VCs, you will always be at the 2nd place or not even selected. That’s the value of networking. Just because you are getting it free, does not mean it’s worthless.