More than at any time since the early 1970s, students and parents are asking whether it “pays” to earn a four-year college degree. Many factors are at work, including family expectations, inadequate high school preparation, insufficient advising, lack of student persistence, rising tuition, and increased loan debt, all complicated by a sluggish economy. New research shows that, for those who persist and are granted a bachelor’s degree, choice of major can be more important than other factors in determining post-college earnings.
Students and their families have long thought that it “paid” to go to college, confident that a lifetime of increased earnings would more than offset tuition, fees, and foregone income from not working full-time.
While intangible benefits of college remain for both the student and society, the belief that a college degree is a good investment is being questioned now more than at any time in the past 30 years. The reasons are varied and depend, in part, on the student.
For some students, the investment question is understandable. Whether due to poor high school preparation, inadequate academic advising, or lack of student motivation, some students incur the costs of college but, because they do not graduate, enjoy little of the “wage premium” that typically accrues to those with a bachelor’s degree.
Whether college “pays” is increasingly being asked by other students. Although those majoring in engineering, health care, the sciences, or business continue to enjoy good job prospects, those with degrees in the humanities, arts, and selected social sciences have more difficulty finding a full-time job with compensation appropriate for a college graduate.
For all students, but especially for dropouts or the underemployed, life prospects are further complicated by the growing problem of student loan debt. With public resources limited and political priorities shifting to health care, federal and state support for universities and for financial aid has suffered. Over the past 15 years, rising tuition has led to increased student borrowing.
For those who are employed, financially comfortable, or retired, these problems seem remote. But, for young adults and their families, they are all too real.