College graduates earn $1 million more in a life time than high school graduates. Everybody says so. But is it true? Leaving aside personal fulfillment, the average college degree isn’t worth as much as people think, argues Charles Miller, who headed the Commission on the Future of Higher Education, in a letter to the College Board. Miller thinks college leaders and policy makers need to confront the soaring cost of college, reports Inside Higher Education.
If tuition keeps rising, we could end up with the academic equivalent of the mortgage crash: Young people with huge college loans they can’t pay off.
(Miller) accuses the board, through its choice of financial assumptions and presentation of data, of misleading the public in its “Education Pays” report, which aims to lay out the benefits to individuals and to society of a strong higher education system and of equitable access to it for Americans from all backgrounds.
A different analysis, “using assumptions more in line with current realities, might reach the shocking conclusions that American higher education today has gotten too expensive for what it produces; that it has become too costly for the typical student … that education (a college degree) does not pay!” Miller wrote.
The million-dollar prediction fails to adjust for inflation, includes those with advanced degrees and assumes students finish college in four years, which is no longer typical.
The lifetime earnings differential for private college graduates is only $279,893 for a bachelor’s degree versus a high school degree, Miller calculates.
Social benefits also are exaggerated, he writes. College doesn’t do much for the poor because they don’t go.
“It’s not a benefit to the community if you’re leaving out the most needy, the least advantaged,” Miller said in an interview. “So you don’t get the same personal benefit that you once did, and from a societal standpoint, higher education isn’t morally and ethically strong because they’re shutting out people who need a chance. I don’t see how we can keep saying, ‘We get this wonderful advantage, and we should just keep feeding it more money no matter how inefficient it is.’
“The arguments that have been used to justify funding are flawed.”
College Board’s economist agrees that the $1 million premium is wrong, but estimates the average public college graduate will be ahead of the game by age 33, while those who go to private college will be ahead in lifetime earnings by age 40.
Eduwonk’s guestblogger, J.B. Schramm of College Summit, is posting on how to change the culture so low-income students do aspire to college. Check out the student essays posted every day this week.
From an economic standpoint, it makes sense that colleges and universities would raise their rates to capture more of the lifetime earnings increase. An equilibrium would be reached when it’s just barely worth the student’s while to attend.
Although my husband and I both have PhDs (he’s an engineer, I teach biology part-time at a community college), we periodically shock people when we say that we could be OK with our kid(s) not going to college. It’s very important that they have a life/career goals and a plan as to how to reach them, but college may not be a part of it (tech training, vocational school, etc may be their choice). Although I think that there can be tremendous benefits from being exposed to new ideas, fields of study, and research opportunities at a college, if the student isn’t going to take advantage of them then having them spend years hanging out on a campus doesn’t do much for them.
It’s hard for me to understand why people are so shocked by the notion that a college degree is less valuable (economically and academically) when a much higher percentage of the population has one. If we could magically give every person in the country a college degree (which seems to be the goal of some people), that wouldn’t suddenly mean that every job is worth what we think of as college-level pay. There is always going to be a certain distribution of high-paying and low-paying jobs. When you give more people undergraduate degrees, it just means that more people have to get master’s degrees or PhDs in order to appear qualified.
I know that the drive to get more people college-educated is well-intended, but the end result is making the degree worth less AND forcing colleges to “dumb down” their programs in order to graduate people who should never have been in college. There are many people who can earn more money as plumbers or electricians than they could ever earn with some generic college degree. We need to get away from the notion that those without college degrees should be subtly looked down upon. A number of the best-educated people I know never finished college. A number of the stupidest people I know have degrees. We all need to pursue the education that makes sense for our own situation and needs.
My brother in law has never taken a college course. Yet he is very brilliant, a self-made millionaire (many times over)… and VERY well-educated.
SELF-educated. He reads, reads, reads.
If I could go back and do it all over again, I’d become a plumber or a carpenter. The money is there and the evidence of your labor is measurable. In the Education field, I’ve found a wealth of degree waving prostitutes spreading over a small pocket of accomplished tradesmen.
Those who can, teach. Those who can’t, administrate. Those who can’t do either, pontificate. Degrees matter only to those who have higher degrees.
This is an intersting discussion.
I will turn 65 this year, so I would hope my comments offer some seasoned, intelligent view of the situation…
1. Learning for its own sake is rewarding, if not monetarily rewarded. I am a deep reader of history, political and military history, as well as contemporary political and social sciences. I am well-read, but so far, it hasn’t made me a dime. Neither has my research into the western US mails, one of my hobbies. My political and social views have alienated a number of former friends who are, sadly, under-read and under-educated.
2. Reasonably intelligent people who work with their hands — and like to work with their hands — can make a very good living. Old saw: To be a plumber, you have to know that shit flows downhill, pipes have right-hand threads, and payday is Friday. It is more complex than that, but I am good with tools and my hands, reasonable intelligent in analyzing problems, and have handled all the systemic problems in my home and rentals for about 38 years now.
3. Understand that everyone who has risen to the top in business, industry or government has paid a price — a price that many of you (us) would not be willing to pay. And for what? To be Speaker of the House? So what? Ms. Pelosi (the example, not the only specimen to be examined) is not someone I would want as a friend.
Ah, well.
Bill (Picks up soapbox. Leaves.)
What is important economically is what happens at the margin. I believe that boys at the margin figured out a long time ago that attending college did not make economic sense with alternatives like plumber, carpenter, electrician and mechanic available. Sexist as it may be to say it, there are not as many attractively remunerative alternatives available to women without a college degree. That is the primary reason behind the 60-40 female-male splits at so many campuses.
It is also clear that there is no reason why people entering crafts and trades need more than 8 years of education. By that I mean 8 years like my carpenter grandfather had including algebra 1 and geometry. We would be much better off starting their technical education as early as possible so that they could extend their work lives at the beginning, when young people want to enter the adult world and would mature more rapidly doing so, rather than extending retirement from 65 to 70 when most folks are getting pretty worn out.
Mrs. Davis is quite correct. By eighth grade (or perhaps ninth, or tenth as a stretch) people have generally figured out whether they prefer thinking or doing. The doers are not likely to enjoy much more academics, and thus don’t profit from it.
I’m a doctor. I entered medical school one year after graduating from college and spent three years doing research between my 2nd and 3rd years of med school. At 33, I’m still in residency, earning just over $40k a year for a 65-hour-a-week job. Adjusting for inflation, that’s about what my fellow college graduates made in 1997, except they didn’t incur an additional $100K in debt, and they’ve been earning at least that for 10 years. A friend mentioned a couple of years ago that he and his wife had reached zero net worth - this, with a $700k house. I won’t hit that for another four or five years.
Yeah, I should have hot-footed it through school. No, I wasn’t that smart. Eternal education has its price, not least of which is the enjoyment of being young - I frequently tell high school or college students considering medicine to think seriously about the fact that their friends will being taking fabulous vacations to exotic places while they fret over getting nine straight days of vacation (one week off, with the weekends on either end tacked on for good measure).
I’m not bitter, and I like what I do. But it’s not a free ticket to The Good Life, unless you count life before 35 as valueless.
Aren’t those numbers a bit misleading because the lump together *ALL* public & private schools regardless of quality? Obviously, the typical graduate of a top college is going to have a quicker payoff than the typical graduate of some no-name school. Even factoring in opportunity cost & tuition paid, I was ahead of the game by 26 not 40 as the College Board is claiming for a private college grad. And I don’t have an advanced degree either.
Hi!
I like your blog and would like to invite you, to join ‘Teachers Planet’: http://teachersplanet.ning.com/
It is an online community for teachers of all levels and curriculum areas.Your visit to the network will provide an opportunity for you to share your expertise with our teachers.At teachers planet you can start your own groups, start/participate in a discussion/ forum, add videos, music, RSS feeds, start blogs and do many more things.
Thank you for your time and consideration
If they had electric screwdrivers 45 years ago I would today be a retired electrician instead of an active engineer.
I checked yesterday with a contractor and learned there were no women in their apprenticeship program.
Were it not for the arbitrary exclusion of non-grads from many jobs, the market for non-specific degrees would be even smaller.
The arbitrary exclusion of non-grads from many jobs has another dimension, besides discrimination against women in mechanics and contracting. This is the exclusion of non-grads, male and female alike, from many jobs that currently require college degrees for no good reason.
For example, most agencies require those who work with disabled children to have BAs. I’m not sure how courses in Western Civ and Philosophy 101 improve such services, but it strikes me that their skyrocketing costs might be lowered somewhat if their pay scales didn’t need to reflect the costs of a college degree.
Then there’s the broader economy: with mass baby-boomer retirement on the horizon, we should be doing all we can to encourage young people into the work force as early as possible. Why not do as the Europeans do, and admit high school graduates into professional schools like medicine and law?
Of course, that would mean raising the standards of our secondary schools up to those of Europe, but that is another story.
I’ll bet Bill Gates reads articles like this and laughs maniacally.
Mrs. Davis
“It is also clear that there is no reason why people entering crafts and trades need more than 8 years of education. By that I mean 8 years like my carpenter grandfather had including algebra 1 and geometry. We would be much better off starting their technical education as early as possible so that they could extend their work lives at the beginning, when young people want to enter the adult world and would mature more rapidly doing so, rather than extending retirement from 65 to 70 when most folks are getting pretty worn out.”
What an excellent idea. Isn’t that similar to what they do in Germany?
It really depends - a degree in Engineering, accounting or nursing compared to a degree in sociology.
The academic content of the apprenticeship for the skilled trades usually exceeds that of most libart degrees. Sleep through backflow prevention or fault current limiters and people get dead.
The number one thing that could be done to restore the prestige of a college degree… get rid of liberal arts degrees.
Yes, they are. One would expect that a degree from MIT or
Harvard would be worth more (economically) than a degree
from Rural Southwestern Tech State U.
Interestingly, Paul Fussell addresse this in his book “Class”.
He writes:
Additionally, of course, is the fact that mixing a 4-year degree in “Liberal Studies” along with degrees in Engineering can generate misleading averages. One can imagine a situation where most/all of the economic advantage of college is captured by 10-20% of those who attend and the rest (e.g. liberal studies 4-year degree from Obscure Rural State U) gain no economic advantage at all. Only reporting an average can hide this.
-Mark Roulo