Recently, as many new college graduates have entered the labor market with big debts and weak job prospects, some economists have begun to wonder whether we may be witnessing the bursting of yet another investment bubble: higher education (Surowiecki, 2011).
With annual tuition at some colleges surpassing $50,000 and unemployment rates rising among college graduates, could the time-honored adage that there's no better investment than a college education no longer be true? By extension, should we revisit the "college-for-all" rallying cry of many education reform efforts?
Does a College Degree Pay?
Despite the current handwringing, college graduates still earn significantly more than nongraduates on average. According to the Georgetown University Center on Education and the Workforce, the difference in median lifetime earnings between college and high school graduates has widened in recent years, growing from 75 percent in 1999 to 84 percent in 2009 (Carnevale, Rose, & Cheah, 2011).
However, these averages mask important realities—namely, wide variances in lifetime earnings among college graduates. Those at the 25th percentile, for example, earn about $1.5 million over their lifetimes, whereas those at the 75th percentile earn $3.4 million. In fact, bottom-quartile college graduates actually earn less over their lifetimes than do high school graduates at the 75th percentile, who earn $1.9 million (Carnevale, Rose, & Cheah, 2011). Stated simply, a college diploma alone is no guarantee of more income.
The Forgotten Middle
Comparing college graduates with high school graduates also overlooks another important part of the picture: middle-skill jobs that require a two-year degree, occupational license, or certification. Two-year degree holders, especially in high-demand occupations, can earn salaries that surpass those of college graduates (Carnevale, Rose, & Cheah, 2011). To wit: 22 percent of workers with associate's degrees earn more than median bachelor's degree holders, and 14 percent earn more than median graduate degree holders (Carnevale, Strohl, & Smith, 2009).
Workers with two-year degrees in STEM subjects (science, technology, engineering, and math), in fact, have greater average lifetime earnings than college graduates in most other career areas. Consider, for example, the lifetime earnings of these two-year degrees: computer software engineers ($3.0 million); aircraft mechanics ($2.3 million); and electricians ($2.1 million). All exceed average lifetime earnings of college-educated school administrators ($2.0 million); writers and editors ($2.0 million); and teachers ($1.8 million) (Carnevale, Rose, & Cheah, 2011).
One reason for the low earnings among bottom-quartile college graduates may be that the number of college-educated workers exceeds the number of college-level jobs available. According to one analysis of U.S. Bureau of Labor Statistics data, 35 percent of the 49 million college graduates in the workforce have jobs that require less than a college degree (Vedder, 2010). For example, 30 percent of flight attendants, 16 percent of bartenders, and 13 percent of waiters and waitresses are college graduates (Matgouranis, 2010). At the same time, Edward Gordon (2009), a workforce researcher and writer, predicts that as many as 12 to 24 million U.S. jobs—most of them requiring technical skills and training in 21st century technologies—may go unfilled between now and 2020 because too few workers have the skills these jobs require.
The Problem with College for All
In a recent report, a Harvard commission observed that the college-for-all push may overemphasize one set of career options while devaluing another—namely, middle-skill jobs that often lead to higher-paying work than college diplomas (Symonds, Schwartz, & Ferguson, 2011). The commission observed that it may be no coincidence that as the United States pushed more students toward college, often at the expense of vocational programs, our high school graduation rate fell from 1st to 13th place in the world. Indeed, many countries that now outperform the United States on a variety of education outcomes—including Finland, Switzerland, Denmark, and Germany—"offer more diverse, robust pathways to careers and practical-minded postsecondary options than we do in the U.S." (Symonds, Schwartz, & Ferguson, 2011, p. 18).
Moreover, James Rosenbaum (2001) of Northwestern University argues that "The college-for-all norm encourages all students to plan on college, regardless of their past achievement. So as not to discourage students, the college-for-all norm … fails to tell students what steps they should take to be successful in college" (p. 57). As a result, many students remain clueless about what it actually takes to succeed in college. A survey of 2,000-plus high school seniors in the Chicago area found that more than one-half of low-achieving students (with Cs or lower) still aspired to college, even though only 13.9 percent of such low-performing students were likely to attain even a two-year degree (Rosenbaum, 2001).
Finally, it's worth noting that high school career and technical education programs boast a completion rate of close to 90 percent (Rich, 2011)—far higher than the 75 percent rate of U.S. high schools in general (Rich, 2011) or the 60 percent graduation rate of colleges (Schneider, 2010).
More Than One Road to Success
To paraphrase Mark Twain, rumors of the demise of the college diploma may have been greatly exaggerated. On average, college degrees—and especially professional degrees—still command a significant wage premium in the marketplace. Moreover, the old days of high school graduates earning a comfortable living are fading fast; the best-paying jobs of the future will all require some form of postsecondary education (Carnevale, Strohl, & Smith, 2010).
Certainly, there are many nonfinancial reasons to attend college. Yet to the extent that calls for preparing all students for college-level work are based on the belief that a four-year degree guarantees a passport into the middle class, educators would do well to remember that the route to a college degree is littered with dropouts and that many college graduates now find themselves mired in debt, underemployed, and earning less than those with middle skills. Indeed, for many students, a two-year degree or occupational certification, especially in high-demand 21st century technologies, may provide a better chance of rewarding work and financial security.
