The Diminishing Value of a College Education
For decades, it's been considered common knowledge that a college degree was your ticket to a well-paying job. Salary surveys back it up, usually showing substantial wage differences between those with a high school diploma and those holding a bachelor's degree. Despite this, the value of a college degree has been rapidly diminishing and could be of little value by the time my own children are young adults.
When evaluating if something is worth the investment, we often look at the time it will take to break even on the proposition. For a basic 4-year degree, that payback is extending itself further and further out. Tuition has been rising at a rate of 7% annually, far past the rate of price and wage inflation. This increased cost means working longer to pay off the same level of education. Wages for college graduates are also diminishing with a glut of employees who hold 2- and 4-year degrees, leading to the pursuit of 6-year and doctorate degrees to try and make up some of the difference. Of course, this may not work for long as more students wise up to it and the market is again flooded with diplomas.
It's also unnerving to many graduates to find out that once they get into the field, they are ill-equipped to do the real-world work required to be more than entry-level. A discussion with Cameron at Magic Valley Mormon revealed that despite spending a semester in an accounting software class, they did not once use a computer. I can't say that the story with my IT colleagues is much better, many of them finding that how things work in the classroom is far from how they work in real situations. I imagine that many graduates find themselves feeling that they cheated themselves out of 4 to 5 years of more useful practical experience.
Employers are also starting to wise up to the experience factor. While many of them will still require a degree for specific positions, more emphasis has been placed on finding candidates who know how to get the job done. Many IT positions state one experience requirement for a degree-holder and another for those without. Usually, the difference is such that skipping the degree and going straight into the field is a better medium-term value than attending college. It may also be of greater value to get specialized certifications to valid knowledge and skills sets, a process that's often a bargain compared to being a full-time student.
With the payback on a degree getting further and further out as costs rise and employers placing more emphasis on experience rather than certifications, college seems like a dubious proposal. While a lot of politicians and educators wring their hands over dropping college enrollments, many don't seem to have done the same calculation that high school grads have. Despite these dwindling enrollments, colleges have unwisely chosen to continue to death spiral by raising tuition and asking for more tax money rather than attempting to thin the herd through more selective admission requirements, cutting staff and wages or bringing more practical experience into their programs. Their refusal to acknowledge the market dynamic, both at public and private universities, is the first step on their march to irrelevance.
It would be great if I'm wrong about where colleges are headed. Given the trend, however, I don't think we can expect much course-changing until it's already too late.