is college worth it

[PODCAST] #548: Is College Worth It? Economist Bryan Caplan Says No

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Today, everyone is asking "is college worth it?"

Oh, wait a minute...no they're not. In fact, considering the looming student loan debt crisis and troubling graduation numbers, almost nobody is thinking deeply and carefully enough about this question. Furthermore, most students, parents, teachers and guidance counselors still view college as the only path a "college track" high schooler should consider. College is simply regarded as inevitable; it's the 13th grade.

Enter Dr. Bryan Caplan. Bryan is a Professor of Economics at George Mason University and the author of a provocative new book titled The Case Against Education: Why the Education System Is a Waste of Time and Money.

His thesis: "Civilized societies revolve around education now, but there is a better—indeed, more civilized—way. If everyone had a college degree, the result would be not great jobs for all, but runaway credential inflation. Trying to spread success with education spreads education but not success."

In the podcast, we'll cover the following topics:

Is College Worth It For Society?

- Bryan's distinction between schooling and education, and why he chose that title for his book
- the book as a response to the "college for all" mentality
- What are the most damning statistics or studies that encouraged this book?
- Credential Inflation: what is it and how it it costing people?
- The complexity of the "education premium" - a frequent counterargument to the futility of a college degree - is higher earnings for college degrees correlative or causative?

How To Decide If College Is Worth It For YOU

- Signaling: college degrees signal conformity. Is this what you want?
- Can you build yourself a better credential than a college degree?
- How you can thrive in a system that probably isn't going to change
- What alternatives are available? Can online education ever be competitive with traditional higher education?

Maybe college is a good option for you if you have clear and complete answers to the following questions:

- Do I have the study, time management and organizational skills necessary to succeed in a demanding college setting?
- Do I have options for minimizing tuition costs? (for example attending in-state)
- If I do have to take on student debt, have I developed a plan for repayment that is realistic with my career goals?
- Do I know what the job market will look like in my field of study? (availability of jobs, competition, location, starting pay, long-term earning potential, future of the industry)

If you have satisfactory answers to all the above questions, great! Let's move on to round two:

- Is attending college the only way you can achieve your career goals?
- Have you thoroughly examined all of your options and weighed the pros and cons?
- Do you have accurate information about the value of a college degree? Keep reading...

Critical Thinking About the Value of College

When you examine the potential personal value of a college degree, make sure you think critically about the statistics you'll encounter. People love statistics because numbers seem so concrete, but they often fail to tell the whole, accurate story. A couple years ago The College Board issued a report called Education Pays 2016: The Benefits of Higher Education for Individuals and Society. These numbers are frequently used to argue for an "education premium" or simply put, an affirmative answer to the is college worth it question.

According to the study, college still looks great! Check out these numbers...

1. In 2015, full-time employed bachelor’s degree holders earned 67% more than high school graduates without a degree.
2. The 2015 unemployment rate for 25- to 34-year olds was just above 2 percent for bachelor’s degree holders, and 8 percent for those who only had a high school diploma.
3. According to the U.S. Census Bureau, in 2015 more than 12 percent of those 25 and older without a degree lived in poverty, compared to just over 4 percent of bachelor’s degree holders.

Most people probably read these stats and say "hooray college." But you can go a step beyond most people and actually think about what you're reading, instead of just absorbing numbers off a report from an institution with a vested interest in keeping college admissions high and growing higher. (I'm not accusing The College Board of deception; these stats simply don't create the complete picture YOU probably need.)

Let's look closer at each number...

1. 67% more in earnings? A small percentage of higher income earners throw the weighting way off here. Those bachelor’s degree holders include many CEOs, IT managers, petroleum engineers, hedge fund managers, etc... Do you wish to be one of those things? If yes, maybe college is the right choice. If not, don't assume your degree lands you 67% more in income. And what is the median age in the data? How far along are these people in their careers?
2. The 2015 unemployment rate: Unemployment can result from a variety of social, emotional and health factors. Such factors might also make college an impossibility. Think correlation, not causation. A degree can certainly make you a more desirable candidate for employment in many fields (it might even be essential), but it far from the sole factor in a person's employ-ability.
3. 12 percent in poverty: There is a lot of overlap between personal attributes that lead people to poverty and personal attributes that hinder college admission and college success. College is not an automatic solution. Keep reading and you'll discover how it can actually lead to new problems.

Here are the real questions

Do people earn more entirely because they went to college? Or do people with higher earning potential attend college more frequently than people with lower earning potential? For many individuals, college has traditionally been a stop on the path to success. But those people were already on a path to success. Dr. Caplan argues the increased earnings are merely a disguised reward for traits these people would have had without college.

Is College Worth It Even For Those Who Are Ready To Attend?

Unfortunately, the "Ready To Attend" label only describes a minority of students who are in college right now. Over the last two generations we've seen a politically motivated push to get more and more young people enrolled in college. This effort is built on the idea that college = opportunity, and the results have been disastrous. And not just disastrous academically. Many students who are unprepared for college suffer socially and emotionally, and this phenomenon is also damaging the culture of many institutions.

According to National Student Clearinghouse data on students who first enrolled in 2008, only 55% percent had finished a "four-year degree" six years later. 55 percent. In school we called that an F. Those who were enrolled full-time had much better outcomes than those of part-time students: 77% vs. 21% degree completion in six years.

For full time students, those odds aren't terrible, but remember we're talking about costs here. You're billed by semester. What if it takes you nine semesters instead of eight to get your four-year degree. What if it takes you twelve? Here are some numbers to consider from a recent study called Four-Year Myth. They suggest it might be wise for students and parents to consider a longer-than-four-year contingency plan.

-just 19 percent of full-time public university students earn a bachelor’s degree in four years
-about 1 in 12 public four-year schools graduate more than 50% of their full-time students in four years

 

Finally and perhaps most importantly - and you can learn more about this in the podcast episode - as the four-year degree becomes increasingly common, it also becomes less valuable. It does not provide the competitive edge it once did. Consequently, more and more graduates are finding themselves in serious debt and unemployed. The Class of 2016 graduate has an average of $37,172 in loan debt (up 6% from 2015) and the national delinquency rate is 11.2% and climbing.

Related Shows On College Issues:

[PODCAST] #384: Professor William Boyes – The Demise of Government School and the Future of Academia
[PODCAST] #385: Putting College Race Tensions In Context
[PODCAST] #375: College Debt – The Most Expensive Lesson of All Time?

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