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College is getting more expensive by the year, and for some students, a diploma might not be worth the hefty price tag.
A new report from the Foundation for Research on Equal Opportunity (FREOPP) asked the question, “Is College Worth It?” They focused on the return on investment (ROI) that a student can expect to make after graduating with a bachelor’s degree.
Almost all students who participated in the study said that "access to a well-paying job is a primary reason for attending college.” But a college degree might not fulfill those expectations.
The study found that 28% of college degree programs leave alumni financially worse off than if they had never gone to college, especially if loans were used to pay for the education. A student's choice of major, the researchers conclude, “is perhaps the most important financial decision he or she will ever make.” Engineering and tech majors show the greatest ROI while psychology majors show the lowest, with only 1% experiencing a significant ROI.
The College Board reported that the average total cost of attending a public school for in-state students is $26,820 per year, while the total cost of attendance at private universities averages $54,880 per year.
If a student graduates within four years (and most don't), their degree would cost between $107,280 and $219,520, depending on which type of school they attend.
A student's financial aid package and the practice of tuition discounting can mean that the net price a family pays will vary significantly from the school's sticker price. Any way you slice it, this is a big investment.
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Many teens aren’t ready for college. I agree it is important to counsel our teens on finding out what they love and guiding them along a career path. But is college truly all about ROI? Do we encourage our kids to go to college solely based on the fact that they will give us a good return on our financial investment?
If you ask both of my children if they thought college was about ROI, they will have different answers. For my daughter, college was so much more than getting that degree and finding a job. It gave her life experiences. She found lifelong friends in college. Her study abroad experience was invaluable. She learned about the business world working at internships related to her major. It was during college that she learned independence, budgeting, developed a strong work ethic, got an education, and basically grew up. She will tell you that you can’t put a dollar amount on those four years.
My son, on the other hand, had a very different experience. He was not a good student in high school and didn’t show much interest in college, opting for a four-year term of service in the Marines. After the Marines, he decided to go to college. For him, it was more about pushing himself to attain the degree and proving to himself that he was capable of that level of education. He attended community college for two years and transferred to a four-year college to finish his degree among the top graduates in his major. And while he did incur some debt acquiring that degree, he would never say it was a waste of time and money or a poor return on investment even though he’s not working in a career related to his liberal arts major.
I’ve known smart kids who felt sure of their career paths at an early age but then got to college and floundered. I’ve known average students without a clue of what they wanted to be who attended college, found their passion and excelled.
With any major financial purchase, it’s important to look at the benefits and determine whether it is worth the cost. Here are just a few benefits of a college degree:
According to the Federal Reserve Bank of New York, the median income for a high school graduate is $30,000, while those with a bachelor’s degree make around $50,000. If you graduate debt-free, that college diploma could help you build wealth a lot more quickly than if you didn’t go to college.
In addition to higher pay, a degree could help your student secure employment. According to the National Center for Education Statistics, in 2019, the employment rate was higher for those with higher levels of educational attainment. For example, the employment rate was highest for 25- to 34-year-olds with a bachelor’s or higher degree (87 percent).
Graduating college can open doors to career paths that would be closed to you otherwise. Having a college degree can improve your chances against other applicants who do not have a degree, even if a degree isn’t required.
Your classes help you build skills you’ll need in the workforce, like problem solving, critical thinking, teamwork and organization. Most employers look for these qualities in applicants and college is a good place to learn them.
In addition, colleges are melting posts of cultures, religions, political views and other beliefs. Being in this environment will help you gain a better understanding of others along with added awareness and compassion that translates well in the workforce.
Internships are one of the best ways to gain on-the-job experience — and maybe even a job offer. Colleges have guidance counselors, career centers, job fairs, clubs and volunteer opportunities to help students secure internships and gain the experience they need to stand out in the job market. Many colleges work hard to make sure that a high percentage of graduates move directly into the workforce in their fields of study.
Study abroad experiences are also available and provide students with the opportunities to experience different cultures and enhance their position in the global marketplace. Colleges partner with universities to provide an education while exploring and learning about other countries and cultures.
Despite all of the above, college is not for everyone. Your student may find another path to a secure future and a career they love.
Some of the most successful business professionals didn’t finish college: Bill Gates, Mark Zuckerberg and Michael Dell built their empires without that coveted college degree.
The Federal Reserve Bank of New York reports that about 44% of college grads are working a job that doesn’t need a degree. Many employers are willing to train entry-level employees who can advance as their skills improve. Employers only require that the applicants have a strong work ethic and a willingness to learn the skills necessary to excel in the work environment.
A college degree will help your student bring home a paycheck but not all degrees are created equal. A history degree isn’t going to net a starting salary comparable to an engineering degree. It’s crucial to consider whether the degree is worth what you are paying for college. Graduating college with $100,000 in student loans to take a job making $40,000 a year just doesn’t make sense.
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If your student isn’t sure about attending college and is simply going because that’s what is expected of them, this could be an expensive experiment. It’s true that many students enter college without a plan, but if your student isn’t invested in the education, it’s a waste of money.
The pressure of balancing school, work, family and friends is challenging for many college students. In addition, not every student is prepared for the academic rigors of college. The National Center for Education Statistics found that only 63% of college students finish their degree within six years.
If your student isn’t ready, save yourself some money and your student some heartache by evaluating other options.
There are alternatives to four-year college that don’t include working for minimum wage. Becoming a real estate agent, medical assistant or web developer won’t require a college degree — but they will require some training. Your student can also enlist in the military, and if they do decide to go to college later, their college expenses will be covered through the GI Bill.
Does your student have an entrepreneurial spirit? Starting a business does not require a degree in business. Websites like eBay, Etsy and Amazon have embraced individuals with a desire to be their own boss. Students can also take free online classes on web design, coding, SEO and more to gain the skills necessary for a freelance career.
Don’t ignore alternatives like trade/technical schools, community colleges, internships or apprenticeships in the career that interests your student. Any trade school or community college cost will be significantly less than the cost of a bachelor's degree.
The decision to attend college or take a different path is not solely based on the return on investment. Take all factors into consideration: your student’s desire to pursue academia, the experiences they will gain in college, the cost of the degree, and the benefits toward their future career goals. Teaching may not be the highest paid career, but it is certainly a noble career choice. Financial analysts may make more money, but if they are miserable at their job is the money they make truly worth it? College is so much more than a degree to get a job and should be evaluated as such.
