06/15/2012 04:43 pm ET Updated Aug 15, 2012

Is College Really Worth It?


We are constantly bombarded with news about student debt and the rising cost of a college education, leading many people to ask, "Is college really worth it?"

Some people argue that by going directly into the workforce, they'll be further ahead on their career path than their classmates who pursued higher education. They point out that after five years they'll have a regular salary and be ready for a promotion, while college graduates will be entering a soft job market, will be unemployed and heavily in debt.

But not going to college is a short-term plan without a long-term payoff. In the 1970s, a person with a bachelor's degree earned 25% more than a person without one. Today's college graduate earns 60% more. People without a college degree earn 31% less in inflation-adjusted dollars than they did just 20 years ago.

Why? Because good-paying, low skilled jobs have been disappearing since the 1950s and will continue to do so. The first wave of dislocated workers worked in factories. As factories became automated, jobs were lost. The next wave of jobs to go were "knowledge based": data entry, programming, tech support and customer service positions that relocated to countries where the cost of labor is cheaper. In the future, we will see the retail job market decline as internet shopping continues to grow. People with little or no education have fewer and fewer jobs where they will earn enough to support their families.

Not only does a college education earn you a higher rate of pay, it also affords you some measure of protection when the job market contracts. People without a college degree have twice the unemployment rate of those with a college degree. However, all of this good news doesn't mean that college comes without its own set of issues.

When students create their education plan there are some non-academic things they need to consider. One of them is the overall cost of their education and how much debt they should take on to pay for it. Students need to closely examine the cost of the colleges they want to attend.

Getting estimates on college costs and debt-load projections is a must. A big benefit to getting accurate college-cost estimates prior to applying is that it prevents the heartbreak of getting accepted, then not being able to afford that school. Students need to look at how much debt they can expect to incur over the course of obtaining their degree, while parents need to examine what they will be expected to pay at the every college their child is considering.

Once students obtain this information, they need to look at what their potential earnings will be upon graduation. They can then select colleges and assume debt with a clear understanding of what they are getting into. For example: civil engineer vs. architect. The current job projections for architects are bleak, so the engineer has a better chance of obtaining a position. Similarly, if you look at an engineer vs. a teacher, the engineer has both a higher starting and career salary. Students must consider these things as they take on college debt. Students and parents need to become better consumers when it comes to education.

For most Americans, taking on some debt is a part of going to college, but remember: total student loan debt should not exceed your expected first year's salary.

Getting into college is not the end game; what happens after graduation matters. As long as students select colleges and majors with long-term goals in mind, they'll end up with a college education they can afford while enjoying the many benefits a college education affords them.