In 1636, Harvard University, the first college in America, was founded in Massachusetts. Since then, the idea of attending college and attaining higher education has been closely associated with wealth and success in a career. In 2013, Gallup (an analytics research company) found that over 70% of adults considered higher education "very important." However, in 6 years, the percentage drastically dropped to 51%.
Why has public opinion changed? Has the answer to the question, can I achieve success without going to college, changed in the past decade?
The Argument
College debt. Two words that 43.5 million Americans are suppressed by. Their loans alone add up to over $1.7 trillion.
Students take out loans from the federal government, private banks, or other organizations. Student loans from the federal government are known as federal student loans. Federal student loans often come with more benefits than private student loans. These include fixed interest rates considerably lower than private student loans and a more flexible repayment plan with a greater forgiveness rate. The students use these loans to pay tuition fees, housing, and supplies - not covered by scholarships or student assets.
College tuition has increased acutely in the past two decades. Average college tuition costs 69% more than it did in the year 2000. These fee increases are partially due to an increased demand for entry, decreased state funds, and increased financial aid from various organizations.
However, college fees are not the only costs that have skyrocketed; the wages of college professors have, too, especially those residing in private institutions. The market price of professors with expensive degrees has climbed, bringing college tuition with them. Currently, the average cost of a 4-year degree is nearly $20,000. In contrast, the average cost of college two decades ago was $3300.
Another reason college tuition has become so expensive is the competition among the elite upper-class applicants. The wealth distribution in America has grown exponentially in the past two decades. From 1989 to 2019, the total wealth of the top 10% of Americans increased by 240%, from $24 trillion to over $80 trillion, while the bottom 50% only increased by 130%.
The top 1% of America currently holds over 26% of the country's wealth. These applicants want comfortable dormitories, high-quality food, and first-class campuses - and they have no trouble paying for it. If elite colleges lower the tuition costs, they will have to cut back on spending, which means they will no longer be able to attract these powerful and wealthy customers. A top-ranked university can increase the market price to however much it wants and still find affluent applicants willing to pay.
As the market price of going to college rises, student loans and debt also rise. In the past, students relied on the fact that workers who had a college degree would be much more likely to receive a higher-paying job than those with only a high school diploma.
The college wage premium (the percentage difference between someone with a 4-year college degree and workers with a high school diploma) in the year 2000 showed that the wages of a college graduate were around 68% higher than those of a high school graduate. This percentage has risen to around 75% in 2022, cementing that college graduates make an average of nearly two times the amount high school graduates make.
However, in contrast to the college wage premium is the college wealth premium. The college wealth premium calculates not only the percentage difference in the wages between a college graduate and a high school graduate but also their assets and essentially the amount of wealth they have. In the early 1930s, the percentage difference was nearly 250%. However, in recent years, the college wealth premium has dropped, and the percentage difference was zero at a certain point.
This is largely because of student debt. Although a college degree significantly increases your chances of getting a job, it does not guarantee one - especially one that can pay off the entire student loan in a matter of years. As a result, college graduates work and toil under their student loans, working a job that often cannot fulfill their daily needs. Although college graduates make much more money than high school graduates, the student debt and loans they live under hold their college wealth premium back.
As college tuition grows, the public finds college to become less and less worth the money and the time. If the percentage between the average wealth of a high school graduate and a college graduate is almost nothing, why go through the trouble?
The Other Side
However, for others, gaining a higher education is still worth it. There are two main reasons: increased job opportunities and networking.
College degrees give workers a distinct advantage in the workplace, unlike those with only a high school diploma. According to several studies, there are 57% more job openings for those with bachelor's degrees than those without. The number of jobs requiring a college degree is on the rise, with 75% of jobs needing workers with college degrees.
Those with college degrees are typically less likely to be unemployed and have generally higher wages than a high school graduate. Over a consistent amount of time, a study by the Bureau of Labor Statistics found that college graduates make approximately 84% more than high school graduates.
One of the main purposes of college is not only to receive a specialized form of education at a higher level but also to meet people from around the world at your level of accomplishment. Through networking, many students work with their college classmates to start businesses and begin projects and research. Some of the most famous companies were founded by like-minded college classmates who benefited from the college that brought them together to spark new ideas. These include Google, Facebook, Snapchat, and many more.
Ultimately, students should decide for themselves whether higher education for them is important enough to counteract the cons. Although student debt counteracts the benefits of higher wages and job opportunities, college still holds value in simply giving students a place to receive specialized education and a space for networking.
