Is College a Huge Waste of Money?

It just might be for 48 percent of university graduates.
For many, the cost isn't worth the outcome. (Photo: Boston Globe via Getty Images)
Jan 29, 2013
Jenny Inglee is a Los Angeles-based journalist and the Education Editor at TakePart.

By 2020, President Obama has declared that the U.S. will "once again have the highest proportion of college graduates in the world."

This sounds like a noble goal, but it may not be as worth it as we previously thought.

A new report by the Center for College Affordability and Productivity titled Why Are Recent College Graduates Underemployed? University Enrollments and Labor-Market Realities reveals an alarming statistic: About 48 percent of employed college graduates are in jobs that require less than a four-year college education, as suggested by the Bureau of Labor Statistics (BLS).

So, to be clear, nearly 20 million employed college graduates didn't necessarily need to go to a four-year institution?!

This may have been interesting information to know before we got into the trillion-dollar mess known as the student-debt crisis. In the U.S., according to The Institute of College Access & Success, two-thirds of college seniors who graduated in 2011 had student loan debt, with an average of $26,600 per borrower.

What's worse is 11 percent of borrowers are more than 90 days delinquent on their loans, which is higher than serious delinquency on credit cards. This level of debt cannot be wiped away by bankruptcy. Instead, students across the country are in debt for decades.

Despite the likelihood of going into debt, several studies have concluded that a degree is still worth it.

Lauren Asher, president of the Institute for College Access & Success, an organization that works to make higher education more available and affordable for people of all backgrounds, agrees. She told TakePart, "In these tough times, a college degree is still your best bet for getting a job and decent pay."

The authors of the Center for College Affordability and Productivity report (Richard Vedder, director of the Center for College Affordability and Productivity [CCAP], Christopher Denhart, an undergrad at Ohio University studying economics, and Jonathan Robe, a research fellow at CCAP) have a different opinion.

The report states, "The claim that 'college is worth it' because there are high economic returns associated with possession of a college degree often ignores the role other factors play in determining employment and wages."

When college-graduate earnings are compared to high-school graduate income, the authors feel the data is highly misleading for vocational success. A factor that contributes to this is the high number of college dropouts in the U.S. Less than 60 percent of undergraduates finish a bachelor's degree within six years.

The study is not suggesting that everyone should ditch college. In fact, the authors write in the report:

No one seriously denies that some skills are clearly learned through higher education. Engineers acquire knowledge from their collegiate studies that makes them far better at solving practical problems than if they never received that training. That idea holds for a host of other occupational areas as well, for example, accounting, architecture, and nursing. Moreover, to the extent colleges develop critical-thinking skills, the generalized knowledge imparted in college might make it easier for people to gain human capital faster in their future careers.

They are, however, raising an important point: A four-year degree may not be the right choice for everyone.

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