College educations are an enormous drain on family budgets so it’s a constant question for parents and students, is a college education worth it? By ‘it’ we mean worth the money, time and effort. Will you actually have a better life with a college degree? We’re going to delve into this debate.
Is it worth the money?
The average cost for a single year at a public university for an in-state student is $20,000. It’s more than $34,000 if you’re from out of state. These figures include tuition, room and board. Financial aid and scholarships are available for many students, however, that’s not something you can count on. Over 44 million Americans hold about $1.4 trillion in student debt. No wonder this is a debate that’s close to our hearts.1
College Board estimates the following annual budgets for undergraduate students in 2017/18. These numbers include transport and living expenses:
$17,580 (community college)
$25,290 (in-state students at a four-year public college)
$40,940 (out-of-state students at a four-year public college)
$50,900 (private non-profit four-year college)2
Remember these are averages and don’t take into account the large variation in tuition fees charged by the different institutions. Prestigious public universities may charge fees as high as the private sector. For example, the University of Michigan (one of the highest-ranked public US universities in the QS World University Rankings®) estimates a total of $62,176 in annual costs for out-of-state students in fall/winter 2018/19. This includes tuition, room and board, books, study supplies and miscellaneous items.3
Although these estimates are provided by the institutions, evidence suggests that potential students often overestimate the costs of higher education. Financial aid is very complex and it’s difficult to fully know how much you’ll have to pay.4
Then, what about the interests costs? How quickly will you be paying your loans? These are answers you won’t have until your future reveals itself.
How Much Will You Earn?
Is there are a direct correlation between your level of education and how much you earn? Yes. The average salary for someone educated to the level of a high school diploma earns a median weekly salary of $678 or $35,256 per year. Comparatively, the average salary for someone educated to the level of a Bachelor’s Degree earns a median weekly salary of $860 or $59,124 per year and it goes up the higher your level of education. There’s also a higher unemployment rate amongst those with lower education levels.5
Research indicates that it is financially worth it to complete college, based on a purely financial model where we take into account the earnings foregone when you’re studying and the cost of the degree versus your future earning estimates. This is true even when someone with a higher qualification is doing the same job as someone with a lower education.6
Is earning potential the measure of happiness?
Although many researchers have alluded to the fact that money doesn’t buy happiness, there is also evidence to suggest that it does if it’s spent wisely. (Boven and Gilovich, 2003).7 Philip Oreopoulos and Kjell G. Salvanes, “Priceless: The Non-pecuniary Benefits of Schooling.” Journal of Economic Perspectives 25, no.1 (Winter 2011): 159–84. [/note]
However, it’s not just the money that a college degree may buy you. Higher education will more than likely provide more opportunities to consider for your career path. Many of the higher level jobs that you can only access with a college degree offer less labor-intensive work and therefore offer more physical longevity for your career.
Even after considering family background and income, workers with more schooling hold jobs that offer a greater sense of accomplishment, more independence and opportunities for creativity, and more social interactions than jobs available to non-college graduates.8 College graduates tend to enjoy better health outcomes on average.9
Happiness is a complex issue and one that can only be truly measured by the individual although it’s worth restating that both financial and non-financial gains are more likely for you if you complete further education.
The Changing Landscape
The information presented above presents a fierce argument for the advent of college education. But what of the future colleges? Already college offerings have changed greatly since the 1970s with the introduction of for-profit institutions such as Xerox PARC. Some degrees offer much more practical offerings than others.
Staley and Trinkle (2011) talk of the landscape of higher education changing rapidly and disruptively. There’s a growing variety of higher education institutions and the cultural environment and the competitive ecosystem are influencing this change. The rate of change in industries may cause employers to take a more holistic view over what skills and characteristics their employees need. For example, where employers are looking for business graduates with high levels of communications skills, it might actually be best to look to the arts and humanities areas when communications skills is their most important attribute.
Globalisation is likely to play a bigger role as more international students are looking to Asia and other countries outside of the U.S. To combat these changes some universities are partnering with international institutions or setting up their own branch in those countries.
The emergence of an ‘invisible’ college may also have an impact on the traditional hierarchical education system. Knowledge networks that we have access to through the progression of technology will offer new ways for people to educate themselves and share that knowledge.
More than 60% of students enrolled in college are now over 25 years of age and more than 60% of students are now working full-time while pursuing their education.10
Where colleges used to treat these types of students as the exception the statistics now show they are to be taken much more seriously. This is a cultural shift that may affect the way colleges structure their delivery and messaging.
These are just a few of the possible trends that will affect higher education change, remembering that the rate of change today is faster than what we’ve been used to and is increasing. You only have to remember the overnight shutdown of the taxi industry to feel the ‘here one minute-gone the next’ possibilities of our future jobs.
The current research indicates that college is well worth the time, effort and money whether it be for financial or non-financial gain. Yet our times are changing and so is higher education structure and expectations. It will be very interesting to see how the landscape alters and how we make decisions with it. Research is one thing, but your experience and your opinion matters.
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