Lessons from the Recession: College Matters

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The opening words "New research from the college board..." made me read this with some skepticism. Of course their research would find those results. Pretty soon, as the cash well dries up further due to the improving online college programs offered, articles showing the stark contrast between traditional campus and computer college will pop up. "Those attending traditional college make an average of 12k more than those attending online universities according to new polls from Stanford" or other one-sided drivel. Universities have to turn bottom line profits like any other corporation.

David M of NC 10:11AM March 05, 2011

I personally feel college for most people is a waste of money and time. I went back to school as an adult and what a financial regret. Was already employed full time and was part time student. When graduating with honors, employer did not give any kind of raise that I felt was warranted. I've tried for higher paying positions (although modestly higher) with my company and was shot down. I currently make (way less) now than the average high school graduate scale listed above. It seems, to me, that college education is just a cog to keep the U.S. economic engine running. Education along with health care are two of the biggest U.S. employers and without students being suckered into big time spending for school, the economy would suffer even further. For most of us I feel it's not worth your money. Save it unless the government pays for you to go to school then definitely go but, otherwise, I say save what little money you have and get a job instead. The pay will probably suck with or without the degree. Except for the fortunate few who have "connections," I doubt most of you will find a good paying job unless you're kissing some serious a**. It's no wonder other countries often times cite the unfairness of pay distribution in this country. It is rather sad and unjust.

Allan of PA 9:00PM March 04, 2011

This article is total crap. Think of it this way, your going to make about 15k a year more average, and you want to retire by 70. So, just for round numbers, lets say you get out of college at 20, and work till 70. You will have worked for 50 years. 50x15,000 is 750,000, an impressive number...until you do the real math. First off, this is for people who can find a job that their degree really made a difference. People who are becoming a social worker, for example, need a masters. This costs even more and takes more time (so you loose 7 years of working time, @ 30k per year, that makes up 210,000). Next is the loan factor. You have to take out 100k in loans to get a bachelors, and another 40k for a masters (that's on the low end). That sets you back another 140k, for now a total of 250k. So now your really only making 500k more then you would otherwise...but then again, there are other costs too. You pay back TONS of interest on college loans over the lifetime of the loan, so basically increase it by 75% and that's what you'll pay back, when you've finally paid it off. Now we are to 495k in expenses, and you only make 750k more (on average). Your going to risk a lot, given the factors for 250k over 50 years...that's only 5k a year difference...BEFORE TAXES!

David of IL 4:35PM March 04, 2011

Certain college majors, like law, medicine, certain business degrees, skew the lifetime earnings for college degrees. What James of IL says is right, many of the degree programs offered at Universities are so far behind the times as to be worthless. Why get a journalism degree when newspapers are folding left and right because the reporting is so for to the left that no one wants to read it. Buyer beware, college is not always the best choice for students.

Denise of CO 1:10PM March 04, 2011

We need more recent data from independent studies as to the actual value of a college education. They aren't worth what they once were. I don't trust any stats from the College Board. That's like asking a barber if you need a haircut. When will the College Board ever tell you that it's NOT worth it? Answer: Never. It's money made by the colleges and universities just the same whether you land a great paying job or end up working at Wal-Mart. The unemployment rate for college grads may be only 4%, but what that doesn't tell you is how many of those grads are working in what would be considered to be "good" careers and how many are stuck working at Wal-Mart. Very misleading, and probably intentionally so. My sister graduated from a vocational high school (yes, I said high school) in 2008. She was in the practical nursing program, took and passed state boards after graduation and found work as an LPN almost immediately, full time at $22/hr with full benefits. Many people discouraged her and advised her instead to go to college. And now a lot of those same people are college grads who can't find decent jobs and are still living with their parents. Meanwhile, my sister is back in college part time to become a RN and just bought her first home. She would, for the purposes of this article be classed as having only a high school education, but her prospects aren't so bleak.
Suze Orman says it's not so cut and dried as the College Board will have you believe and that a college education is not always worth it in terms of return on investment. She also says vocational and technical programs are the best kept secret and usually yield a better return on investment. It's time we hear from someone besides the College Board. They have everything to gain by manipulating statistics and convincing you that the massive debt is always going to pay off. And it WILL ALWAYS pay off...for the colleges and universities. But the fact is, the odds aren't in YOUR favor the way they were 10-20 years ago.

Fawn of OH 12:04PM March 04, 2011

Lets compare the economic benefit between a college graduate and a high school graduate. For a college graduate, you will have four less years to work, since you are in school for those years instead of at work, so lets do the math.
For the college grad, you work for 30 years at the average salary, you will earn $1,671,000.
The high school graduate over the same time (34 years) will earn $1,149,200.
You will also save yourself from having to borrow four years of living expenses because you worked instead of attending college, for an additional $135,200 that you did not spend. Since you borrowed living expenses, you will have to pay interest on that amount, which with student loan rates and the time period for paying it back, you will pay back double (or more) that amount, for a total savings of an additional $270,400 by not having to support yourself while in college. This brings total salary and borrowing cost savings of living expenses for not attending college equals $1,419,600.
This makes lifetime earnings difference between a college degree and a high school degree only $251,400. This is just enough to cover tuition of (after taking into account the interest of the student loan) $31,425 per year. ($251,400 divided by half to account for interest, divided by four for per year cost). This is the break even point. If your tuition is more than this, then you will end up making less than the average high school graduate through out your lifetime. If you are in the 1/2 of college graduates that make less than the average college student, then you will end up making even less over your lifetime than the average high school graduate.
A college education is a great thing, but if you have to borrow for college, it doesn't make sense as an investment - as you will end up making about the same as if you didn't go to college and will loose four years of compounding investment returns on your retirement fund. The return on a college education only makes sense if someone else pays for it. Student loans make a college education too expensive for the return that you receive. If you want a college education, work to get scholarships and grants or attend part time while working and paying for school as you go. If you want your child to go to college, save heavily so that you do not saddle your child with loans that will eat up all of their increased earnings.

Jamie of DC 11:31AM March 04, 2011

What is so irresponsible about articles like this is that they use the same strategy as for-profit schools: They lump all colleges together when coming up with these statistics and use them to push education for all.
Rate of employment, starting/top salary all mean NOTHING when you have such a gap between wortheless digrees at poor institutions (e.g. English B.A. at a for-profit or low ranked college) vs. a great in-demand degree from a top school (e.g. Engineering at MIT or Accounting at UPenn). The "average", when there is such a bi-modal distribution, is a worthelss figure.
Author, do SOME break down, so that people aren't brainwashed with this "all education is good" myth. If you really belive that, I have 3,000+ journalism/english/history/sociology majors from my brother's sub-par University that are going to be in the unemployment line and moving to Uganda to escape their NON-DISCHARGABLE education debt that will like to have a word with you.
If you're going to give us these figures, do a little more digging, please. At least give notice that choice of school and field is VERY important to a student's results. Be responsible.
Also, "earnings" is a poor indicator of wealth. If the average college grad earns $20,000 more per year than the average high school grad. Does this really overcome 4-5 year of lost income (while in school) and, for ones that borrow, 10 - 30 years of student loan payments which could equal in the hundreds of thousands?
Please author. Be more repsonsible.

James of IL 11:05AM March 04, 2011

i have a B.A Hons in accounting in finance and even that is still hard to find a job....useless degree?...no degree is useless...i got a friend with mass comm that got accounting jobs....it's all luck....
even if i use all my salary to pay student loan....it would take me 10 years.....10 YEARS....

sam of KS 10:26AM March 04, 2011

Do research and obtain a degree that you can actually get work in.. I got a degree in engineering and had a job before I graduated because it is an in demand field that hasn't been hurt by the economy.. and in the future when i get my loans paid off I will be able to go back and get a masters in anything i want because i already have a great bachelors degree.. You can't get a worthless degree and expect someone to give you a good job, you've got to market yourself with a meaningful education and gain experience with internships while in school

Brian of PA 10:09AM March 04, 2011

If they are worth so much, why does my father in law sit unemployed with two associates degrees? Why did my husband go to college only to be sitting here for the past 3 years still looking for a job....it's not College that gets you anywhere now days, it's experience.

anon of GA 8:21AM March 04, 2011