Last week's annual snapshot of American living standards from the Census Bureau offered plenty of statistics to show just how bad the last decade was for the paychecks of most Americans. For higher education, the report was mixed: good news for students on the degree payoff, but another healthy dose of reality for colleges that believe current upward trends in tuition prices will continue unabated.
First for students, the report underscored yet again the lifetime economic benefits of getting a college degree. The poverty rate for Americans in their 20s with a college degree in 2010 was 8 percent, compared to 23 percent for those in the same age group with just a high-school diploma (the poverty line was set at $22,314 for a family of four in 2010).
While the poverty rate for those in their 20s with a bachelor's degree has increased by two percentage points since 2002, it jumped by six points for those with a high-school diploma during the same time period. For both groups, the poverty rate has improved as they moved into their 30s, but those with a high-school diploma are still much more likely to live in poverty even 10+ years after high-school graduation.
| In poverty status, age 20-29, by educational attainment | |||
| 2010 | 2006 | 2002 | |
| Some/no HS | 43% | 32% | 32% |
| HS diploma | 23% | 18% | 17% |
| Some college | 17% | 13% | 12% |
| Four-year degree | 8% | 7% | 6% |
| In poverty status, age 30-39, by educational attainment | |||
| 2010 | 2006 | 2002 | |
| Some/no HS | 39% | 28% | 29% |
| HS diploma | 19% | 14% | 13% |
| Some college | 12% | 8% | 8% |
| Four-year degree | 4% | 3% | 4% |
Even so, there is mounting anger by college graduates who blame their alma maters for the fact they can't find a job in this bad economy. The lead story on the NBC Nightly News on Friday evening featured several YouTube videos of enraged college graduates asking the question that's been getting a lot of media attention in recent months: Is college worth the investment? As usual, the news segment highlighted an outlier in the college-debt debate: a student who graduated with a bachelor's degree in international studies in May from North Carolina State University with more than $100,000 in debt, about four times the average.
For jobless college graduates, their degree and the time, effort, and money invested in it seems like a convenient punching bag. If colleges want to continue to sell themselves as a ticket to success in the future, they need to do a better job at defending their degrees against the rising chorus of the "Don't Go to College" crowd.
The jobless young are an angry band not just in the United States, but around the world, as shown by the protests in Europe and the Middle East this past year. This pain is the result of a changing global economy, not a bad college education (although in some cases, colleges shouldn't be let off the hook--just see the book, Academically Adrift).
As Michael Spence noted in a recent article in Foreign Affairs, globalization is forever changing the jobs picture in the United States and other wealthy countries. Nearly all the new jobs created in the United States between 1990 and 2008 were in the non-tradable sector of the economy, particularly health care and government, which are unaffected by global competition. The Economist noted last week that the "natural rate" of unemployment in the United States is now around 7.5 percent.
Along with last week's income report from the Census Bureau, the long-term changes we're witnessing to the U.S. economy should be yet another sign to college leaders that something has to be done about rising prices, and fast.
Perhaps the number that should be most disturbing to colleges in the Census report is that the income of the typical American family has dropped for the third year in a row and is now roughly where it was in 1996, when adjusted for inflation. Meanwhile, the inflation-adjusted price of a public four-year colleges is about 1.8 times what it was in 1996.
Rising family wealth during the 2000s, helped greatly by inflated home prices, allowed colleges to continue to pump up their prices. The census numbers and the nonstop bad news on housing show those days are over. Add to that the fact that there are likely to be substantial cuts in federal student aid in the name of deficit reduction in the coming years.
The vast majority of tuition-dependent private colleges (and a growing list of private-like public colleges) are simply not ready for this shifting market. One president of a very tuition-dependent private college told me in a conversation over the summer the new normal for his institution is 3 percent annual tuition growth. While maybe reasonable to him considering the recent past, I asked if a rate that high is sustainable given the current economy. He seemed surprised that I'd even ask the question.
A higher-education admissions and marketing consultant who specializes in the private-college sector told me recently that his firm does many retreats for trustees and senior college leaders that in part highlight the average household income for the state where the college is located.
"The wealthy board members are very surprised and cabinets [of college leaders] are silently reflective and nod in agreement," he told me. He always asks the college officials if they could afford their prices if they didn't get the tuition remission. "Almost always they say no."
We know the economic model of colleges is broken. Now the economic trends are telling us that the days of pushing the problem off to another president or another board of trustees are behind us. The University of the South cut its price by 10 percent this year. Will others follow? Can they afford to? If not, what is their way out?
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What boss will pay big money to a details guy who cant focus on the main game - a rational, logical solution, or at least approach, to the problem. the payoff comes from taking responsibility for a problem unsupervised & solving it - u dont learn that from a purely technical degree - in fact - am skeptical u learn much practical from any degree - but its a valuable exercise that gives employers confidence u can learn real skills as u go.
has long been the case, dumb rich kids go to college, smart poor ones dont - grads from "socialist" countries can make far more in usa cos there is such a premium for a college education due to USA expense.
not much constructive here - just how i see it
the opposite is true of course. if you want to increase the supply of educated workers you must first have a demand for them
for example back in the 80s when I was in engineering school you could look in the newspaper and find pages and pages of want ads for engineers and techs. if you graduated with decent grades you were virtually assured a good stable career with good pay and bennies. not so much today where there a scant few openings with unrealistic laundry lists of qualifiactions that get hundreds of resumes sent in for each opening
the local community colleges are dropping and scaling back many of their industrial programs due to lack of demand. the potential employers for these students have gone to mexico and china. the CAD lab is now a storage room, and the machine tool lab is lights out with the machines under tarps
suggest u try a dog eat dog society like thailand - almost nothing works right - basic math, map reading for cabbies - taking an order for more than 2 things ... - even the rich have poor teachers w/ predjudices
would rather live in a society w/ a good basic level of education than one w/ a few nobel prize winners
I am all for people getting educated for personal growth and enlightenment
but at the end of the day there also has to a be value for that education, and here in the US that value is job marketability and earnings potential.
And using that "bottom line" measurement the value fo a college education in the US has been declining while at the same time the costs rise beyond the rates of inflation with no apparent value added to justify the increased costs
My question is what value has been added to the college education that can justify cost increases way beyond that of any measure of inflation? the case is being made that the value of a degree has declined as degrees now seem to be required for even the most menial and clerical entry level jobs.. when taking the the costs of the education into account as well as the loans the potential earning power drops dramatically as well
the local schools around here also are throwing up new buildings like crazy, even though the old ones served fine for years
Give back. Support the next generation.
But at the same time a college degree has gotten excessively pricey although there are always alternatives to keep the costs down, such as commuting from home where possible or online/distance learning. And as for anyone that would go 100 thousand in debt for a B.A, I have to say there would appear to be a lack of common sense on their part.
Suppose you conducted this experiment. Take two groups of high-performing high school seniors. One group is given a free college education at the college of their choice. The other group each receives $150K in cash, and enters the labor force. Each group is told that the idea is to make as much money as possible.
After twenty years, who would be the most successful?
That's literally the only thing that stops them - actual flat-out inability to pay. Because when they take in more students and build more campuses, the need for colleges go up. The price will only start to go down when you run out of people above the poverty level to bring in - because until then, there's just no pressure to lower prices. Geez, it looks like leaving education up to the government to prevent shenanigans like this that just screw over families -was- a good idea!
Sadly, I would have to oppose - for the moment - the 'most academically qualified' part. It's a sad fact that we've got a lot of inequality in and under the high school level, and while you can 'work harder', what you can't do is move out of a bad location - you're a kid. You don't have control over that. Poverty plays a major factor, again, and kids don't have a choice to be poor or not. In time I could see that restriction going in, but not right now. And it's something we can afford if we stop getting into stupid expensive wars.
The real problem is with students (and colleges) stuck in the mindset that the tools for sucess are to be found in copius reading and writing vice in specific skills that are in demand. Taking out a six-figure loan to learn underwater basket weaving or the 21st century equivalant? There's a saying about fools and their money...
They want to be a liberal arts college for trust fund babies to go on a four year drug binge while discovering themselves. They want to be a remedial high school for the kids who couldn't quite learn earlier. They want to be a diploma factory for industry.
Pick one and find a better teaching model that fits your choice.
Most will want to be diploma factories because that's what our economy needs most. That means finding a way to impart industry relevant information cheaply. Find what employers want and teach it. Offer certifications to go along with degrees. Move cutting edge research into the workplace by teaching techniques to students. Don't make students and their future employers engage in 6 month training programs.
This worries me because it has troubling implications for the independence of research. Funding for research projects will be based not on the potential for new knowledge but on whether or not they will result in better widgets.
As i said above, schools need to choose their market. Some schools can do non-applied research. Some can teach liberal arts. But most need to prepare their students to become servants to their fellow men. Increasingly this means researching technologies and then quickly distributing that knowledge.
The statistics presented in this article are a typical fiction of the academic industry, to bolster their case for "more money!" ... of course. How about a comparison of the poverty statistics between two German-style comparable groups: college graduates vs journeyman graduates of apprenticeship programs?
An apprenticeship in the IBEW generally lasts 6 years, during which the apprentice is a) being paid a living wage, with benefits, b) is being trained in a highly technical field with steady and reliable demand, and c) gaining skills that can be parlayed in a number of different ways ('side jobs', move into management, entrepreneurship). During the 6 years apprenticeship, it would be reasonable to estimate the apprentice earns around $200,000, graduating not only debt free, but possibly a homeowner to boot.
A journeyman IBEW electrician will make $70,000 - $100,000 a year with benefits and retirement.
But she'd still just be "a high school graduate". American needs people who know how to do things: certified welders and radiology technicians. America does not need any more undifferentiated liberal arts undergraduates from non-elite colleges.
Here's the deal life offers everyone: believe what you want, act on it, and reap the results.