Is a College Degree a Pre-Requisite for Middle-Class Prosperity?
People disagree about lots of education issues—from how to deal with the student loan crisis to whether there actually is one at all. But one thing most people, either Democrat or Republican, agree on is that education is important—and that a degree leads to a better-paying job and a more satisfying career.
But is that true? In today’s economy, college tuition increases an average of 6-8% per year—much more than inflation rates, which in 2010 are only at about 1.9% so far. Student debt averages out at $23,000 but can range in the hundreds of thousands—and many students graduate with the kind of debt you usually get when you buy a house. Add to that the rising unemployment rate across the board, shrinking numbers of well-paying jobs on offer, and added prices for other key services like health care, and the situation for new college graduates looks bleak.
More People Want to Go to College
That doesn’t stop people from going to college, of course—or the most financially needy from having faith that college is a ticket to a better life. In 2008, according to reports by the Chronicle on Higher Education, 47% of 18-26 year olds with incomes near or under the federal poverty level were currently or had been enrolled in college—a 5% jump from 2000.
But just because more people hold degrees doesn’t mean the opportunities are waiting for them when they graduate. According to Gordon Lafer of the University of Oregon’s Labor Education and Research Center, quoted at Ohio.com, it makes sense that a Bachelor’s degree doesn’t automatically open the door to middle-class prosperity. He points out that giving out more college degrees online doesn’t guarantee that there will be a corresponding increase in well-paying jobs. And the jobs in most demand aren’t the ones that pay well—but service-sector jobs that require little education.
The Salary Gap - Real or Unreal?
Still, more jobs are requiring college degrees. And it’s still the case that you make more money over your lifetime, statistically, than someone without a four-year degree. But there are signs that gap is shrinking.
"In 2004, the Census determined that people with a college degree earned an average of $51,554 in 2004, compared to $28,645 people with a high school diploma alone."
Recently, studies by the College Board claimed that college graduates earned as much as $800,000 more than high school grads over a lifetime. Other studies suggested the figure was $1 million or more.
But with jobs declining along with wages, some researchers question those figures. According to the Wall Street Journal, many of those estimates are taken from a Census Bureau report compiled in 2002 and based on 1999 data. The data doesn’t look at real data from students taken over the space of their careers; rather, it just multiplies current earnings. It also doesn’t take into account income tax deductions, employment breaks, or student loan debt. And in 1999, average expenses or four-year private schools were around $15,000 per year—much less than the $26,000 or more per year average in 2009-2010.
Other studies mentioned in the article suggest that the gap between college and high school graduates is more like $279,893—according to a report in 2009 that includes tuition costs, discounted earnings and actual salary data for graduates 10 years out of school. And in an economic downturn, it’s likely the gap will decrease still more—as graduating in a downturn can depress earnings for decades.
A college education may still be worth it, financially, for most students. But with rising debt loads, job scarcity and increasing tuition, students should be very mindful of debt when it comes which college they choose—now more than ever. It’s crucial to compare financial aid offers carefully to pick the college with the best deal. In the long run, enormous college debt is likely not to be a good payoff for a more prestigious diploma for many students.
What is the Middle Class - YouTube.com
Ohio.com: Degree Can’t Always Open Door to Middle Class
US Inflation Rate Forecast
Huffington Post: College Degree Fails to Lift Many Young People Out of Poverty
The New Yorker: Learning By Degrees
Wall Street Journal: Earnings Gap Between College and High School Grads Small
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