Is a College Degree Worth it Today?

Higher education today isn’t what it once was. Most families in the 70’s could get a good job without a degree, have a family and a home on one income. Someone with a college degree was considered securely in the middle class. As times and technology changed so did the requirements to get a job. It became the standard to need an Associate degree or a Bachelor’s degree. Children today grow up with technology and will often surpass the adults with their ability to learn new technology. Is a degree for an entry level position still necessary today? Trade professions are on the rise, and often kids with degrees end up in the fast food industry because they are unable to get a job in their field. The cost of college, textbooks and time invested may not be worth it today.

The Census Bureau defined middle class as anyone with income ranging from 50 percent to 199 percent of the national median, or midpoint, income level. High-income individuals -- those with incomes two or more times higher than the median -- increased from 10.9 percent of the population to 14.7 percent. Low-income individuals - those with incomes less than half of the median -- increased from 17.9 percent of all Americans in 1969 to 22.1 percent in 1989. Median income for a family of four was $37,152 in 1989, so such a family with income below $18,576 was considered low-income. A four-member family with income of $74,304 or more was considered high-income.

Today’s employers typically require a degree as a pre-requisite and often a graduate level degree just to get started. A college degree is designed to be an investment in your future. Degree credentials are intended to open more job opportunities to jobs that imply pay higher wages. It is implied that once you have obtained your degree you will be more cultured and well rounded. High school students today are constantly being pushed toward furthering their education by pursing a college degree. It is said that college is the place to explore your interests and grow as a person while increasing your intelligence. Colleges have become more versatile in recent years by offering online classes, colleges and degrees in an effort to help people that find attending a traditional campus are not able to fit their lifestyles or financial situation.

Jonathan D. Glater wrote an article on how higher education is a private investment that only the student benefits from. Glater analyzed three examples of choices of words used to describe aspects of higher education finance. The borrower, is college worth it, and unfair favor. He compares how the “investment “might be worth it for some students in certain circumstances and not for others. Glater pointed out that where you invest in a college can give you a better return. Not all colleges are equal, the most expensive colleges with higher social status will give the student a higher advantage in the job market. He also compares the advantages of the degree chosen and eligibility for Public Service Loan Forgiveness. (Glater)

When families make plans for their child’s college future research shows that financial backgrounds play a large role in in the decision they make. Children and Youth services did a review on how children’s parents play a role in their future college decisions. According to parents' survey responses on college hopes and worries, 85% believe their children's college education will cost more than $50,000 and 40% are very concerned about accumulating student loan debt (The Princeton Review, 2016). Moreover, the percentages of parents reporting these concerns have increased over time (The Princeton Review, 2016). Among parents of current undergraduate students, nearly 90% believed since preschool that their children would go to college; however, despite holding high and long-term expectations, only 40% had plans for financing educational costs when it came time for their children to attend college (Sallie Mae, 2017). Parents who reportedly did not have plans for college financing prior to their children's college attendance were less likely to rely on advanced savings and more likely to rely on student loans (Sallie Mae, 2017). About 20% of parents—across all income levels—have reported being unwilling to take on any debt to help finance their children's college degree (Inside Higher Ed, 2013). Though, parents with higher monthly incomes (> $7,500) have reported a greater willingness to take on more debt, especially debt amounts at or above $50,000 (Inside Higher Ed, 2013). (Friedline, Rauscher and West) This research focuses on the parents’ level of education and financial status. A parent’s decision to help invest in their child’s future also plays a role in deciding when the college investment will pay for itself. Parents that saved up for their child’s college years will have a higher success rate than the child that had to finance their college your all on their own. A person graduating with a degree and a mound of student debt will take much longer if ever to see a return on their investment. When you take into consideration the high drop out rate for college students, students end up burdened by debt, waste their time, and see their expected earnings markedly reduced. Taxpayers wind up shelling out for grants and subsidies that go to waste, and for federal loans that are unlikely to get repaid. In that case it is a no-win situation for anyone. Parents expectations for their child goes unmet, students take on considerable debt and taxpayers pay for a wasted student grant.

During the economic recession of 2008 many truths came to light about our economy. The housing crisis and student debt crisis were closely tied together. College debt was considered to be a “good debt’ and that debt had been taken on by the students’ family. When the 2008 recession came about, and family were losing their homes, savings and retirements student loan debts shifted solely to the student alone. A decade later the government, colleges, and financial institutions still consider the burden of student debt to be a family responsibility. Seth Frotman wrote an article about the student debt crisis. He begins the article with this statement “Student loan debt has fundamentally changed the lives and livelihoods of tens of millions of people. This notion is both obvious and intuitive to the forty-four million Americans who currently owe more than $1.5 trillion in student loan debt yet remains surprisingly controversial in Washington. financed higher education model has broken the basic tenets of the social contract between the U.S. government and its citizens— the contract that relies on the supposed notion that higher education is the nation’s great equalizer; and that attending college always provides a clear pathway to the middle class. An honest assessment of the situation shows this to no longer be true. This student debt crisis did not happen by accident. A $1.5 trillion market is never an accident. This quiet crisis is the consequence of incremental policy decisions that drove up college costs and shifted the burden for shouldering these costs to individual students— a shift financed by consumer debt.” (Frotman) The government, colleges, and financial institutions has yet to change their standards to adjust with the new circumstances of the majority of student debt being the burden of the student only. “For nearly a decade, the federal government has attempted to get a handle on the country’s growing student debt problem. And yet, as policymakers across the government have supposedly worked to prevent another crisis, it remains clear— it is too late. Those promises were broken and, yet again, America finds itself facing a crisis. Today, more than eight million federal student loan borrowers arc in default. Another three million borrowers are at least two payments behind. In 2017 alone, 1.1 million federal student loan borrowers defaulted— that is one default every twenty-eight seconds.” (Frotman)

No one seems to consider what happens when society changes. The student debt crisis effects millions of Americans and could very well lead to the next crisis. Student loans are given based on a series of assumptions. First is that the student will walk out of college and get at least a middle-income job, and second is that the students’ family will share the expense of the education. College tuition and inflation are on a steady rise while income is more stagnate and unemployment is still very high. The average college graduate will be locked into a renting situation and buying a house will be unattainable considering their debt to income ratio. Unemployment makes getting a middle-income job harder to get and more likely the student would be fortunate to get the entry level job that leaves the college graduate under employed and a mound of student debt. The college graduates that I have spoken with all agreed with the statement “I didn’t need my degree to do my job, but I needed my degree to get the job.” The truth of that statement makes me believe that this is a problem society is putting on students today. Students are being forced into student debt just to get a job. The Federal Reserve Bank of New York shows that Student debt has risen to an unhealthy and unreasonable level as shown on the chart below:

The growth of student loans of 457.68% from 2003-2017 will more than likely end up with the USA in a crisis.

In conclusion, a degree would be worth the financial burden if it is the only way to obtain certain knowledge you are passionate about and that knowledge will result in obtaining the finances to pay for it. A degree would be a financial burden if you made the decision to get a degree from parental or societal pressure that resulted in a job that had little or no financial growth. Job satisfaction should also play a part in your decision making. One of the hardest decisions a freshman makes is to decide what they want to do for a profession. Finding a student’s natural talents and natural ability is something that is usually overlooked by everyone involved including the student themselves. For example, a Trade School or online courses might get better results for a student rather than attending an on-campus university and living in the dorms. Some Trade School Certificates can result in high paying jobs also and may be the best way the student learns. Not everyone learns by reading books and taking tests. Some students need to learn hands on or on the job training to understand concepts. Regardless of the decision reached the student needs to have a real understanding of the financial consequences of their decision. No matter how the student decides to leave home and become an adult they need clear goals and a realistic plan on how they will pay for their future. Colleges and financial institutions need to be more realistic about the ability of a student to pay back their student debt, implement steps to ease that burden such as pay according to your income level and get government oversite in place to keep it all legal, realistic and fair.

Works Cited

Glater, Jonathan D. ""NARRATIVE AND RHETORIC OF STUDENT DEBT."" Utah Law Review (2018).

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Friedline, Terri, et al. ""“They will go like I did”: How parents think about college for their young children in the context of rising costs."" Children and Youth Services Review (2017): 340-349.

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Frotman, Seth. ""BROKEN PROMISES: HOW DEBT-FINANCED HIGHER EDUCATION REWROTE AMERICA'S SOCIAL CONTRACT AND FUELED A QUIET CRISISS."" Utah Law Review (2018): Issue 4, p811-846. 36p.

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