09/16/2013 04:25 pm ET Updated Nov 16, 2013

Are College Grads Overqualified and Under-prepared?

There is no shortage of research demonstrating the correlation between levels of college education, individual income, and national economic growth. However, there is growing evidence that the benefits of college are not what they once were. A study released by McKinsey, based on the experience of 5,000 graduates, found that "the full potential of graduates is not being realized, as nearly half of graduates from four-year colleges say they are in jobs that do not require a four-year degree."

In this context, many -- including former Secretary of Education William Bennett in his new book -- are asking: Is college worth it? Or is the higher education system simply producing overeducated, overqualified workers who are weighed down with loans that are impossible to pay given their inability to find the good jobs they were expecting when they first began their education? Is technology inevitably flipping the equation and reducing the returns to traditional education?

Jeffrey Selingo, editor-at-large of the Chronicle of Higher Education, understands the importance of these questions better than anyone. He explores them in his latest book, College (Un)bound, published by New Harvest, in which he argues that times have indeed changed. "For many generations," he says, "college helped to create a vast middle class, attracting the most talented students from other countries, and graduated young Americans who were the best educated in the world."

The situation is much different now. At least 46 percent of students who enter college don't finish within six years. Among those who do, college doesn't ensure the same quality jobs as it did before, or the solid middle class income that it once did. And the cost is becoming unbearable: According to Selingo, "student debt has surpassed a trillion dollars while, since the late 1970s, the annual cost at a four-year college has risen three times faster than the rate of inflation. Some 50 million Americans now hold some kind of student loans."

At the same time, those loans aren't offering the return they used to. According to Bennett, a third of college grads take jobs that don't require college degrees. And the McKinsey report points out that "nearly half of college grads say they are in a job that doesn't require a four year degree, and four in ten graduates of the nation's top 100 colleges are unable to get jobs in their chosen field."

Perhaps even more troubling is the class aspect of these tuition dynamics. Selingo argues that "at the 200 colleges that are most difficult to get into, only 15 percent of entering students in 2010 came from families in the bottom half of incomes in the US ($65,000)." A similar situation in Chile led to a series of massive protests and school strikes, often paralyzing the school system for weeks. Unfortunately, this discontent has manifested as a narrow revolt against private education per se instead of a means of grappling with the broader problem of the mismatch between education and the skills needed for the modern workplace.

The Chilean example demonstrates that Latin America faces some of the same challenges as the U.S., although the region has its differences as well. We still struggle with getting students to go to college in the first place -- and sustaining the economic growth of the past decade will be difficult without enough highly skilled graduates that can add innovation and entrepreneurship to the economy. The Latin American "multilatinas" are one of the great success stories of recent years, and to continue their expansion, they will need a high-quality workforce.

Other problems track what is happening in the U.S., including the lack of good information to inform decisions about where to go to college, and information about job prospects for various courses of study. In addition, many graduates finish their university educations with little or no practical work experience, and struggle to find work in their field. At the same time, Latin America's economic growth over the past decade has created a growing demand for quality human capital. This means not just traditional "hard" skills that one learns in a classroom, but also the suite of capabilities necessary for success in the 21st century "knowledge economy" -- problem-solving, collaboration, critical thinking, and creativity.

To acquire these skills, college is not the only option -- although it is often treated as such in our political discourse. In fact, many high-skill jobs, especially in the IT sector, are achievable, rather, through vocational schools or online courses -- with a much smaller debt load. However, non-traditional schooling is a controversial topic, and the issue of what schools receive official accreditations is intensely debated.

Given the new -- and continually changing -- types of skills currently in demand, it is not clear what the ideal path is for high school graduates. But what does seem clear is that we need an expanded conception of what constitutes higher education. It should include on-the-job training and apprenticeships, coupled with practical learning across a range of subjects, and mentoring that assists the transition from structured high school life to the freewheeling and self-directed atmosphere of most college campuses. If our graduates are going to succeed - and excel -- in the new economy, we must first expand their tool kit.