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| From Rampell's post in Economix (linked at left). "Census estimates of median annual earnings help capture the college income premium. In 2011, the median male college graduate earned 1.95 times as much as the median male whose highest educational attainment was a high school diploma. In 1991, that ratio was 1.76. For women, the ratio is up, but not by as much: It was 2.03 in 2011 versus 1.99 in 1991..." |
Around this time during the second semester of our senior year, it's nice to be reminded that our efforts are not in vain...
Despite questions about the practical value of a college education in today's economy (click here, here, or here if you are prepared for a heavy dose of senioritis), conventional reasoning and evidence seem to stand when it comes to considering the potential return of a higher education:
Catherine Rampell of the NYT's "Economix" blog recently posted about what she dubs the "college premium," i.e. the employment and wage advantages that come with a bachelor's degree. She says, "the wage gap between workers
with a bachelor’s degree and workers with no more than a high school diploma
has been growing over the years... You can see this in the unemployment
numbers: The jobless rate for people with a bachelor’s degree was 3.7 percent
in January, versus 8.1 percent for those with no more than a high school
diploma." Part of this, she adds, is due to the fact that "people with
college diplomas are much more likely to get jobs, period, than people without
the credential. Part of college graduates’ income premium, then, comes from the
fact that they are just more likely to be employed in a typical
week." Of course, this does not address the very prevalent
issue of student debt (which is often the main—and very
valid—argument of less optimistic
analyses such as those linked above).
So, while your
opportunity cost of getting up and going to school tomorrow may
seem unconscionable, the potential future return may very well be worth
it. If you do plan on pursuing a college degree, how do you justify the
opportunity cost against the potential returns? Are you optimistic about the
"college premium?" What other factors weigh in when it comes to the
economic benefits and disadvantages of pursuing higher education?
TL;DR? Stay in school, get more money (probably).
3 comments:
I think that going to college is more than worth the opportunity cost, not only because it implies a better economic future, but also because of the knowledge you gain, the experience you get, and the friends you make in college. The problem with higher education now is that, for us, the cost keeps rising and rising, making the opportunity cost even higher than it should be. The disadvantages of not getting higher education are little in my opinion, unless you're like a Bill Gates, then by all means skip college and do your thing. So in general, I agree with staying in school.
Being an AVID student, I have to advocate for everybody to go to college. The third source that examined the value of a college degree and how students really spend their years in college with “infographics” was a bit exaggerated in my opinion. Even if students took classes about pancake syrup or majored in bowling, it doesn’t necessarily mean that their years of college were wasted (or that they spent them wasted). Many students end up changing their major several times before they figure out what they want to do as a career.
I am optimistic that earning at least a Bachelor’s degree will be worth the opportunity cost of going to college and having to pay off loans in the future. There are opportunities for financial aid out there, which these sources didn’t really mention such as subsidized loans that don’t collect interest until after you graduate. I have also heard of loan forgiveness for teachers when they teach at a public school for five consecutive years.
The college premium may depend on the school that you attend. Public universities, or at least the ones in California, can’t guarantee graduation in four years because of class impaction. It may take five or six years to get a Bachelor’s degree depending on what you decide to major in, which means more tuition to pay for with more loans. Obtaining a Master’s degree would mean even more tuition but if you play your cards right, attending college will eventually pay for itself. Whether we’re all future English majors (according to Mr. Thurtle) or STEM majors (according to Mr. Silton), if we have all been soulless enough to get into college, we should be able to redeem our souls doing something we enjoy after we graduate from college.
Although the ominous cloud of student debt is constantly hanging over seniors and current college students alike, I agree with Marvin and Maribelle and think that it's still very worthwhile to attend college. If nothing else (although it is many, many other things) it is a door opener--as Liv stated, college graduates are far more likely to get jobs and earn more than just high school graduates are, which, over the course of a lifetime, would more than pay back student debts.
That being said, I don't think it's unfair to say that students should address their individual situations prior to making decisions. Not everyone will go on to become a doctor or lawyer, and if there is simply not enough financial aid available for someone to "jump right in" to the collegiate world, holding off for a year or so and earning some money at what may not be considered a prestigious job might be a worthwhile option, even though it would mean that their path to higher pay would be delayed.
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