Pay to Graduate from College
The question of whether a college education is worth it is not new. Starting in the 1970s, students, parents and blue-collar employers questioned the value of a college degree when so many university graduates at the time found themselves working at construction sites and in the hospitality industry as waiters and barristers (Bls). Today, against the background of the Great Recession, young college graduate students are faced with national unemployment rates above 6 percent. This is further compounded by the undeniably high tuition costs at both private and public institutions (The Institute for College Access & Success). In spite of these stark realities, this paper argues that a college education is indeed worth the effort and cost, but contextual considerations must be made to weigh the costs against the benefits of a college degree.
Sticker Costs are Misleading
According to the Institute for College Access and Success, up to 69 percent of students who graduated from public and private colleges in 2013 had a debt averaging $28,950 (The Institute for College Access & Success). Other Studies by the Federal Reserve Bank of San Francisco indicate that in the last three decades, the cost of attending college has increased more than thrice from a low of $4,600 annually in the 1970s to $15,000 annually in 2013. In spite of the evidently higher costs of graduating from a four-or two-year college, the actual out of pocket expenses paid by students is significantly lower than the sticker price.
Access to scholarships and grants, which students do not have to pay back, lowers the cost of college for many students and more importantly for lower and middle-income students who need such financial assistance the most. Other facilities such as the recently enacted income-driven repayment plans that limit the amount of income that can be spent on paying college loans drastically reduce the college fee debt. For example, a student at Harvard will pay a net fee of $14,445 annually after receiving grants and scholarships, take $11,000 in federal loans and pay just $127 monthly over 10 years in loan repayments (Weiner).
Lifetime Earning Premiums
Falling wages and higher incidences of unemployment or underemployment among young college graduates could support the argument that college education is no longer a worthwhile investment. However, it is self-evident that those with a higher-education degree have better employment prospects and higher chances of keeping their jobs in a post-recession environment. Indeed, findings from the Bureau of Labor Statistics show that in 2013, the national unemployment rate was 6.3 percent, while that of high school degree holders was at 6.5 percent and 3.2 percent for those with a college degree (Bls).
Personal Benefits of a College Education
Economic theory shows a strong correlation between higher education levels, access to employment and advancement opportunities, and a country's overall domestic production. A large population with a college degree is not only a public good; it also confers private benefits to the graduate. Going to college can be valuable in expanding an individual's social network, providing greater access to professional opportunities and exposes people to broader experiences about the world. College-educated people are also more likely to make better choices in terms of lifestyle, investment, or reproductive health (Brand & Xie).
In conclusion, in spite of what may seem as stark economic times characterized by higher college fees, higher unemployment rates and lower wages, the cost and effort put into a college education is worthwhile. A feasible remedy to close the employment gap would be to device or reinforce policies that encourage more students to invest in majors that meet the current market demands-these would help to increase young graduates' employability and therefore their lifetime earning premiums, which would eventually pay off for the initial college fee investment.
References
Bls.gov. Employment Situation Summary.
Bls.gov. Table A-4. Employment status of the civilian population 25 years and over by educational attainment.
Brand, J., & Xie, Y. Who Benefits Most from College?: Evidence for Negative Selection in Heterogeneous Economic Returns to Higher Education. American Sociological Review, 75(2), 273-302.
Laly, M., & Bengali, L. (2014). Is It Still Worth Going to College? Federal Reserve Bank of San Francisco.
The Institute for College Access & Success (2014). Student Debt and the Class of 2014. Oakland: The Institute for College Access & Success.
Weiner, J. (2015). Do the benefits of a college education outweigh the cost?. Washington Post.