Is College Education No Longer Worth It?

Because college fees are so high compared to the financial benefits a degree provides, the cost may no longer be justifiable.

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Commentary

Years ago, I argued with my libertarian friends about the value of a college education. They saw it as a waste of time and a senseless expenditure of money. They thought this was especially true for anyone who majored in the liberal arts, which was my chosen field.

My argument came from my own experience. In studying literature for nearly seven years, I had developed skills that I believed were invaluable to becoming successful in life, regardless of one’s chosen occupation: analytical thinking, for example, which is necessary for problem-solving, and the ability to speak and write effectively, which is necessary for getting one’s ideas accepted in any competitive environment.

I still believe in the value of those skills and of a liberal arts education in general. But back then, a degree from a public college cost less than $10,000 and a private college might have cost five or six times that much.

Today, it is much, much more expensive. And because it is so high compared with the financial benefits it provides, the cost is no longer justifiable.

So I find myself sympathetic to the charge that a college education has become, for many, a scam.

The Jaw-Dropping Cost

According to U.S. News & World Report, the average tuition for the 2023–2024 school year for a public college is $10,662 for in-state students, with out-of-state tuition averaging $23,630. For private colleges, the average is $42,162, and for elite private colleges, the numbers are worse. On average, elite private colleges exceeded the $90,000-per-year threshold. That’s for one year!

Millions of college students are taking out loans to finance all or part of their expenses. Many of those loans come with relatively high interest rates (6.5 to 7 percent), which makes it increasingly difficult for them to keep up with the payments. Some are simply giving up and declaring personal bankruptcy. Thus, in 2023, bankruptcy filings by young college graduates in the United States hit an all-time high. This is happening at a very inconvenient time—just a few years post-graduation, when these young people are trying to begin their careers and their families.

You might argue that the investment in a college degree, however expensive, will eventually “pay off” because college graduates typically earn more than high school graduates. And that’s true. Male college graduates earn, on average, about $500 per week more than male high school graduates, which amounts to about $900,000 over their lifetimes. (The financial advantage of a college education for women is less, just $630,000 over a lifetime. One study suggests that gender differences in occupation and industry are important to explain the gap, and so are women’s workforce interruptions and shorter hours in high-skilled occupations.)

On the face of that, you might think that getting into $200,000 to $500,000 worth of debt is still “worth it” because of the lifetime financial advantage. However. the debt figures reported are misleading. They don’t include the cost of interest, which, depending on the interest rate and length of the loan, can add another 30 percent to the total indebtedness.

Furthermore, these are gross numbers. And like the numbers used to demonstrate a pay gap between men and women, the comparison is between the average compensation of all men and all women, without accounting for the fields that men choose to enter as compared with women, or how many hours men work as compared with women.

When you measure the pay gap correctly—comparing like professions and like hours—you discover that there is no gap at all.

If, instead of comparing the gross numbers, we compare the average compensation of college graduates versus high school graduates with skills—such as the mechanical trades or the dangerous jobs that are predominantly done by men—it’s a different story. Here’s an example: plumbers versus doctors.

On top of that, some of the world’s biggest companies—including Google, Apple, and Netflix—no longer require a college degree for most new employees. This, according to those businesses, is because so many young people today are able to self-educate in the necessary entry skills and then fill in the gaps after they have been hired.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.