Going to college is probably a more profitable investment than ever, but the people investing in it don't seem to think so.
A majority of college graduates say that students who recently left school will get a lower return on their degree than they would have a decade ago, according to a report released on Tuesday by an educational technology company, Greenwood Hall. The report was based on a poll of 2,000 people, 900 of them college graduates of all ages, conducted by Nielsen for Greenwood Hall. Respondents pointed to high student debt and low starting salaries as the chief culprits for what they saw as the declining value of college.
“The level of cost and the debt burden on students is greater than it has been before,” says John Hall, chief executive officer of Greenwood Hall. “If you don’t land that job that is a good paying, good type of position right after you graduate, then there’s a lot of pessimism with students and their families.”
The people who earned the most were the most pessimistic about the current value of college. Nearly two-thirds of people making over $100,000 said college has lost value, compared to its usefulness 10 to 15 years ago. Fewer than half of those making less than $35,000 felt the same way.
Such widespread disillusionment may make four years of lectures and exams—which costs families more than it used to, no matter how you slice the tuition bill—seem worth skipping. In reality, not going to college is far more expensive than ending your education at high school. The difference comes to hundreds of thousands of dollars.
Young people with college degrees made $17,500 more than did their peers who had not pursued an education past high school in 2013, according to a 2014 Pew Research Center analysis (PDF) of Census Bureau data. With the earnings premium higher than it has been in the modern era, college degree holders can expect to earn around $500,000 more over a lifetime than they would have earned if they opted out of the classroom after 12th grade, says Rick Fry, a Pew economist who conducted the analysis.
“Employers increasingly favor the kinds of skills that young people with college degrees have,” says Fry. Companies will pay for the goods that college imparts—think technological and basic problem-solving abilities over, say, fluency in ethnographic theory—and that can translate into jobs that are “good” in a broad sense: Not only are they more lucrative, they come with additional benefits.
Not going to college, meanwhile, has become an increasingly reliable path to poverty. While earnings have been steadily declining for young people who haven't gone farther than high school, they have been rising for college grads, with less-educated Americans more likely to be living in poverty or unemployed, the Pew analysis shows. When they do have jobs, people without a college degree are about half as likely as those with a bachelor’s degree to land a gig with a retirement plan, a pension, or union representation.
To students who are struggling or growing cynical about their long-lost tuition dollars, Fry advises patience. College, the economist says, pays off in decades, not years. “The game isn’t over yet.”
Update, Feb. 11: corrects breakdown of millennial union representation in economic outcome chart.