Crippled by Debt, Most Recent Grads Say College Isn’t Worth the Cost
As a conduit for knowledge, and a ticket to the middle class, a college education is considered priceless. Yet alumni of the nation’s more expensive, exclusive schools—especially those who graduated in an era of skyrocketing tuition—question whether the debt they accumulated was worth it.
That’s the conclusion of a new Gallup-Purdue University survey, which asked 30,000 graduates of four-year colleges in the U.S. how their higher-ed experience affected their postgraduate life and career satisfaction. Compared with graduates who have been out of school for at least a decade, before student-loan debt hit the national agenda, recent grads were far more dissatisfied with their lives, particularly if they faced huge bills to pay for their diplomas.
Though the dissatisfaction may be a matter of perception, the results offer a snapshot of how the student-loan system of financing ever-increasing college costs could push lower- and working-class students further away from four-year schools and more exclusive private colleges.
The survey is part of “a growing body of evidence that our debt-dependent system may discourage low-income loan-averse students from enrolling in college [and] reduces completion rates among students who make it to college,” said William Elliott III, a Kansas University social welfare professor and director of the school’s Center on Assets, Education, and Inclusion.
When the link between student-loan debt and life dissatisfaction “distorts career choices, delays building homes and families, and may ultimately lower the return on a degree by reducing retirement savings and overall net worth, there is greater reason for concern,” he added.
Although higher education is the most significant investment an individual or family will make, only half of graduates surveyed strongly agreed that college was worth the cost. While there were only a few percentage points of difference between graduates of private and public colleges, the percentage dropped sharply when graduates of for-profit colleges were asked: Just 27 percent agreed that their diploma was worth what they paid.
The percentage of alumni who say college was worth the cost “drops significantly from 50 percent among graduates overall to 38 percent among graduates between 2006 and 2015,” the generation most likely to have high debt, according to the survey. “Among recent graduates who took out student loans of any amount, one in three (33 percent) strongly agree that their university education was worth the cost.”
And as the amount of student loan debt rose, the percentage of satisfaction plunged, according to the survey. Of recent grads with $50,000 or more in student loan debt, just 18 percent “strongly agreed” that they got their money’s worth, while the same percentage “strongly disagreed” that they paid the right amount for their diploma.
“It does not surprise me. Research aligns with the survey findings in this case,” Elliott said in an email interview. “While there is some evidence that suggests student loans can have a positive psychological effect, particularly for low-income students while they are in college, these effects appear to disappear once students leave college.”
While the effect may be because of the economy and the perception of “educated barristas”—college graduates who can only find work making coffee—“I don’t think [the survey results] should be used to condemn the student loan program by themselves, or the value of going to college,” Elliott said. Still, “they are a piece of evidence that should be combined with other evidence to make an informed decision about [a degree’s] value or lack thereof.”
Despite the dissatisfaction of grads, a degree is still the best guarantee of a job that will allow people to pay the rent. In a report released in 2014, the Federal Reserve Bank of New York of San Francisco found that someone with a college degree will earn about $830,000 more over a lifetime, on average, than someone who only has a high school diploma. And data from the Bureau of Labor Statistics consistently shows that people with only a high school diploma have unemployment rates twice as high as their peers with bachelor’s degrees.
One bit of information from the survey is particularly valuable, Elliott said: Grads of lower-cost public colleges showed about the same level of satisfaction as graduates from pricier private schools. While smaller, more expensive schools saddle students with more debt, he said, research (and his own experience as a private-school graduate whose diplomas opened doors for him) has shown him that the influential connections people make on campus often more than offset the cost.
Ultimately, “I think the problem is with a system of financing higher education that influences some children to decide on where they go to college based on how much money they have and not on the amount of desire, effort, and ability they have,” Elliott said. “We need to have our financial aid system align with the ideal of education as an equalizer in society and not artificially provide some kids with an advantage over others in the decision-making process.”