Is College Still Worth It?

With college being more expensive than ever, recent graduating classes face astronomical student loan debt, not to mention dwindling job prospects. Is getting a degree still worth it?

If you’re anything like me and still face a mountain of student debt, you may question whether that piece of paper you were handed after four years of studying and partying was worth the hassle you’ll likely face for years to come.

In fact, out of more than 1,500 respondents to a recent Salary.com survey, 35% of people said college is not worth the expense, and 43% say a college degree isn’t really necessary to succeed in life.

This may have something to do with the fact that the average American college graduate now faces more than $29,000 of student loan debt, according to recent research by the Institute for College Access & Success's Project on Student Debt.

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Even though you’re chipping away at that behemoth of a bill with monthly payments to loan companies, it’s hard not to feel discouraged when you look at what remains--have you even really made a dent?

According to the Federal Reserve Bank of New York, the outstanding student loan balance in the U.S. is about $1 trillion, and 31% of all borrowers are effectively delinquent on paying back their loans, according to recent research by the Federal Reserve Bank of New York. This number is even higher for millennials.

Despite this expensive investment in a college degree, Pew Research Center reports the average unemployment rate for 20- to 24-year-olds in 2012 was 13.3%, up almost 4% from just eight years prior. Median weekly earnings for this age group also fell from about $510 in 2001 to $464 in 2012.

The question stands: was it all worth it?

When I graduated from Rutgers University, the economic bubble has just burst, and we had a new president promising to make things better--“Yes, we can” he said.

After six months of job-hunting, I was finally offered my first full-time position out of college, and I felt so lucky and grateful for it.

Before this, though, I had considered dropping out of college in my sophomore year to become a hairdresser--I was still undeclared at the time and undecided whether I wanted to pursue journalism.

My mother countered that I should first earn my college degree and then explore something else if I wasn’t happy with it. It seemed like a fair compromise at the time, and I wound up sticking with journalism.

Interestingly, there appears to be a common thread between my story and most people who have attended college: their parents encouraged them to do so.

According to Salary.com, 82% of parents want their children to go to college.

This is not too surprising, since the older you are, the more you feel college was worth it: while only about half of millennials think college is a worthwhile investment, about three quarters of baby boomers are pleased with their decision to attend college.

This may be largely due to the soaring cost of attending college and the need to use loans to leverage that cost: it now costs on average more than $18,000 for tuition, fees, room, and board for a full-time student at an in-state public university, according to the nonprofit college entrance examination organization, College Board.

More than half of millennials said they financed these costs through student loans as compared to only 29% of baby boomers who did so. More than a third of millennials say student loans are their “biggest financial concern,” according to a Wells Fargo survey last year.

What’s important for education institutions to note is that almost 60% of millennials said they wished they had learned more about how loans work in school, and 31% of Salary.com survey respondents said they regret taking out loans and wouldn’t do it again if they could go back in time.

Thanks to student debt burdens, it’s taking far longer for younger Americans to start saving: according to the Federal Reserve's most recent Survey of Consumer Finances, households headed by college-educated millennials without any student debt obligations have about seven times the typical net worth of households headed by millennials with student debt.

Without the ability to save, young people are putting off important life decisions: Salary.com found between 23% and 41% of millennials have delayed getting married, 50% to 65% have delayed buying a home, and even more have delayed contributing to retirement funds at work because of student loans.

So is skipping college an appropriate alternative, or do we need to just suck it up and pay the piper?

Despite former New York City Mayor Michael Bloomberg’s famous advice for young people to skip college and become plumbers, recent research from the Federal Reserve Bank of San Francisco shows that most people are better off in the long run for graduating from college: the average college graduate will earn more than $800,000 more than the average high school graduate by retirement age.

So it all comes down to deciding whether the up-front investment and sacrifice is worth the benefits down the road.

[Image: Flickr user Ambuj Saxena]

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8 Comments

  • Look, if parents want their children to attend college they should buy less "stuff" for their kids while they are growing up and save that money in a college fund. They should also help their kids pay off the debt they do accumulate if they are able. Students could also contribute by laying off some of the 'extracurriculas' and working part-time during high school and college so that their loans would not be so huge. They could also go to less expensive community colleges for the first two years and live at home. Lastly, they should work more than forty hours per week (doing whatever they need to do) for the first five or ten years after college and get rid of the debt by making extra payments on the principle. These are all things kids used to do routinely to get college degrees; what happened? No use complaining AFTER the debt is incurred.

  • Here's my question; why is it reporters and the media are only writing about the cost of college and student indebtedness? Why isn't the media investigating why college is expensive?

    As a consultant to colleges and universities, my company's area of expertise is the prospective visit for prospective families. As co-founder and CEO I've probably toured more colleges in the past eight years then anyone in the country. (I average about 6-8 campus tours per month.)

    College used to be a Spartan lifestyle. But in the early 2000's it began catering to demanding Millennials (and their co-purchasing Boomer parents). Campus are now crowded with luxury dorms, fitness centers that a NFL team would covet (complete with lazy-rivers), on-campus Starbucks, sushi, vegan and gluten choices in the the dining hall, state of the art everything and technology along with faculty and staff to counsel, mentor, provide for study abroad and internships.

    Why is nobody talking about this?

  • Your remarks are very edifying. I appreciate them! College has always been tough to negotiate but, in the past, students got part-time or (in my case) full-time jobs while attending college so that loans would not be unmanageable when we graduated. Parents gave us less 'things' while we were growing up, saved money, and helped us pay for school with the savings later. It is interesting to hear your experiences with all the 'perks' students expect these days. For every problem there are two sides to the story that need to be addressed and each stakeholder has to listen to the other stakeholders and be willing to hash out a viable solution. As far as I can see, that has become a art dying in our culture.

  • Interesting point Rachel that you mention the parental recommendation that the student goes through college first. Conditioned thinking from the traditional past. The times have and are rapidly changing, particularly the changing world of work. In today's world for many young people college and university costs are prohibitive. Why begin a career with a huge debt? My thinking challenges the typical university path, in that the future is all about creating your own unique brand based on becoming a serial master of a variety of skills, from which you can earn a living, yet more importantly create a working lifestyle of your choice. Admittedly you need to learn and develop skills however college and university is not the only way. And, is having a JOB the future? More wealth and opportunities can be created and realised among the entrepreneurial and self employed sector. Let's encourage our future generations to think global in their approach to work, life and career!

  • I think we also need to keep in mind the non-economic benefits of going to college. There are many of these as well. Providing you move out of your parents house to do so, you learn a lot about being independent. It's also the first time in over 12 years that most of us are faced with going into a situation where we know no one or close to no one. This can help us increase our social skills and, if we want, can be a change to reinvent ourselves.

    But most of all, what I learned from college that would be difficult to quantify is discernment. I learned to recognize false or faulty research, to question instead of taking everything that was told to me as gospel, to ask tough questions, how to research and find legitimate sources of accurate information, etc.

  • If you really know what you want to do and fully understand the implications of your chosen career, then yes you should absolutely go to college. Some degrees get you a job right of the gate, others require doing whatever it takes to gain experience and not everyone succeeds. I think both high schools and colleges could do a better job of educating kids on that.

    Overall, I would say that anyone who is even somewhat academically inclined should try to go to college. It's undeniable that a college degree raises your earning prospects in life. Sadly, costs have made that less and less feasible for even the middle class, let alone those in lower income brackets. But unless you're incredibly talented at something that is very high value, you really need SOME kind of post-secondary education to establish yourself with a good career. That could be college or it could be trade or professional school.

  • The missing question in all of the this is "go to college to learn what?"

    For many people without a perspective of what they want for a career or job or what their aspirations are, college may be a huge mistake. College may or may not provide any value to someone, but it will likely provide much more value if they know what they want for a career or job and take the appropriate college program(s) to lead them towards that goal.

    Going to college without a "plan" or focus is a dicey proposition at best, yet too many people do it, which is probably what is reflective of the mediocre results.

    And yes, Mayor Bloomberg had some good advice. Trades, like plumbing or electricians, pay well and are going to always be in demand and have the added benefit that they can't be outsourced offshore. It may not be glamorous, but it will pay the bills (and then some).