What the current state of higher education means for students.
I am a firm believer in higher education. With four college degrees (including a doctorate), I can personally attest to the economic value and overall benefit of a higher education. Research shows that on average, an individual with a 4-year college degree earns roughly $1 million more than a person with a high school diploma over the course of a 40-year career (Georgetown University, 2015). Clearly, there is a significant economic return for individuals with a 4-year degree.
Yet now more than ever, this economic return is being diluted by the increasing costs associated with higher education. Over the past two decades, higher education costs have soared, which has resulted in massive amounts of student-load debt. According to the Federal Reserve Bank of New York (2014, November), student-loan debt rose by 348% from $241 billion in 2003 to $1.08 trillion in 2013.
Even more alarming is the fact that the upward trend in student borrowing has continued in recent years: it is now estimated that some 45 million Americans hold approximately $1.5 trillion in student-loan debt. In fact, the average borrower now owes approximately $38,000 in student-loan debt (ValuePenguin, 2019).
So what does this mean for students? It means that students really have to evaluate whether or not a college degree is the best move for them. After all, only 58% of students pursuing a 4-year college degree graduate in 6 years (yes, 6 years). Even if a student is fortunate enough to walk across the graduation stage, he/she is likely saddled with student-load debt. And what do we know about student-loan debt?
For starters, we know that student-loan debt significantly delays life events: it delays getting married, buying a home, having children, and saving for retirement. In other words, student-loan debt puts people in a very difficult financial position before they really even start their adult lives. Due to their obligations, individuals with student-loan debt have limited freedom to live their lives, particularly from a financial standpoint. Finally, student-loan debt causes untold anxiety, stress, and mental anguish.
“Student-loan debt significantly delays life events...it delays getting married, buying a home, having children, and saving for retirement."
So is higher education at a crossroads? The answer is both yes and no. Without a doubt, there will always be a place in society for institutions of higher learning. Our economy and our society benefit greatly from a well-educated and enlightened citizenry. Aside from increased earning potential, research shows that individuals with a higher education are more engaged citizens, are healthier, and live longer. Hence, the benefits of a higher education, both economic and otherwise, are clear.
Yet thanks to runaway costs, the value of a higher education is being questioned at every turn by students, parents, politicians, and the media. As a result, the economic return on a college degree has become intensely scrutinized (and rightfully so). Decades of mismanagement by higher education administrators has resulted in a model that is not sustainable. Hence, higher education costs continue to rise year after year and those costs are simply passed on to the consumer (i.e., students and parents).
As indicated, there are numerous benefits to a higher education. However, with the enormous investment needed to attain a college degree, the economic return must be carefully evaluated: all options must be weighed and all outcomes must be considered.
Here at College and Career Navigator LLC, our goal is to provide you with the facts and help you make an informed decision. Indeed, we are staunch advocates of higher education, but we are also enthusiastic supporters of the skilled trades, as well as the military. Simply put: we want to help you navigate all of your options so you make the best decision for you and your future!
Jeffrey Vaske, Ed.D.