Most parents of college-age children will attest to the skyrocketing expense of a college education. The cost of a bachelor’s degree at a private college can run some $200,000. And for those who graduated from good ol’ State U back in the day, be prepared for sticker shock when you look at tuition levels and expenses for many publicly supported colleges.
Since the 1980s, two steady trends have been (1) continuous increases in tuition at rates beyond inflation; and (2) loans supplanting grants as the primary form of financial aid. Students are now leaving college with debt levels once reserved for graduates of professional school programs that promised high salaries in return.
Still and all, it has remained a gospel truth that earning a bachelor’s degree is worth it.
Not so fast
Francesca DiMeglio, writing for Business Week, reports on the magazine’s study of the economic value of a bachelor’s degree:
If there’s one truism that goes virtually unchallenged these days, it’s that a college degree has great value. . . . Over the course of a working life, college graduates earn more than high school graduates. Over the past decade, research estimates have pegged that figure at $900,00, $1.2 million, and $1.6 million.
But new research suggests that the monetary value of a college degree may be vastly overblown. According to a study conducted by PayScale for Bloomberg Businessweek,the value of a college degree may be a lot closer to $400,000 over 30 years and varies wildly from school to school.
To accompany its study, the magazine has developed a ranking study for colleges and universities based on tuition levels and graduate earnings. The study concludes that:
the number of schools that actually make good on the estimates of the earlier research is vanishingly small. There are only 17 schools in the study whose graduates can expect to recoup the cost of their education and out-earn a high school graduate by $1.2 million, including four where they can do so to the tune of $1.6 million.
Is it all about earnings?
I’m not crazy about evaluating institutions of higher learning solely on how much their graduates earn. A college degree should be about more than vocational clout and salary levels. Degrees in the liberal arts, for example, may not translate into the highest paying jobs, especially in the years immediately following graduation, but they provide an exposure to important ideas and ways of thinking.
Nevertheless, college costs are out of control, and I can’t blame Business Week (or any other periodical or organization) for questioning the costs and benefits and evaluating whether future earnings justify the price tag.
A day of reckoning?
I doubt that we’ll see hundreds of thousands of high school graduates suddenly abandoning their college plans anytime soon. And plenty of adults will continue to return to school to finish up a degree. However, the marketplace of higher education is headed for a crash. Rising college costs are starting to look a lot like the American health care system: The status quo is unsustainable.
It is anyone’s guess as to what this shakeout will look like, but unless existing colleges and universities get their act together quickly, the fallout will not be pretty for them.
Go here for a related post, “Law schools and the legal job market.”