Is college worth the cost? Many recent graduates don’t think so.

30 Sep 2015 | Author: | No comments yet »

Is college still the ticket to the good life?.

In the coming weeks, tens of thousands of young adults who graduated from college last spring will get their first payment notice for their student loans. If you leave college with student loans, there’s a good chance you’ll end up feeling that your education wasn’t worth the liabilities you’ll have to carry.

We’ve all heard this before, and we’ll likely continue hearing it for a while, but here it is once again: the Wall Street Journal reports that many recent college graduates doubt that their education was worth the price. As they look at the bill — with an average monthly payment closing in on $400 and with a decade of payments ahead of them — they inevitably will ask the question: “Was my degree worth it?” If the results of a national survey released on Tuesday are any indication, many of them will question their investment.

The two-year, 60,000-person poll, conducted by Purdue University, the Lumina Foundation, and Gallup, asked grads about their satisfaction with their college education. Half of recent black alumni and 42 percent of first-generation college students (neither parent completed a bachelor’s degree) had debt, “raising particular concerns about how student loans affect the capacity of higher education to level the playing field for many Americans with less-advantaged backgrounds,” the report said.

Overwhelming student debt forces people to delay post-college milestones, including going back to school, moving out of parents’ homes, buying a car or house, starting a business, getting married, and having children. Unsurprisingly, loans play a role in students’ evaluations: 63 percent of respondents relied on them, with a median loan of $30,000 – enough to impact major life decisions, from the choice between a job and further education, to expensive purchases like a first home, making it “a long-term handicap,” in the words of Purdue President Mitch Daniels. Mitch Daniels, president of Purdue University and former Indiana governor who created the survey, said that these “results serve as another reminder that student loan debt can be a significant obstacle to a student’s future success—and, in some cases, a long-term handicap.”

It was a key point the survey wanted to address. “Given that many families invest heavily in higher education for their children, there should be little doubt about its value,” the report concluded. In 1976, Newsweek magazine ran a cover story asking “Who Needs College?” with a picture of two college graduates in their caps and gowns on a construction site with a jackhammer and a shovel, suggesting that as much as “27 percent of the nation’s work force may now be made up of people who are ‘overeducated’ for the jobs they hold.” At the time, fewer than half of high-school graduates in the U.S. went on to college the following fall.

Purdue is hardly alone in encouraging potential applicants to think long and hard about the supposed value of a college degree at a time when tuition hikes have far outpaced inflation. President Obama has made quality higher ed a priority in his second term, pushing for low-cost community college and overhauling the government’s College Scorecard website, which rejects college rankings in favor of information like graduation rates, post-grad income, and loan debt. The average wage of workers with a bachelor’s degree has declined 10 percent in the first part of this century, according to the Federal Reserve Bank of New York. “Having a B.A. is less about obtaining access to high-paying managerial and technology jobs and more about beating out less-educated workers for the barista and clerical job,” according to a widely cited study in 2014 that found demand for college-educated knowledge workers has slowed as the tech revolution has matured.

As a result, students and their families are increasingly trying to measure the return on their investment by weighing the payoff of degrees from different colleges and certain majors. Peter Cappelli, a professor at the University of Pennsylvania’s Wharton School, lays out a guide for families in making this so-called ROI calculation in his new book, Will College Pay Off?: A Guide to the Most Important Financial Decision You’ll Ever Make.

In the book, Cappelli is dismissive of picking a vocational major based on the hot jobs of today because they might not even exist by the time students graduate. Alumni felt better about what it cost them to go to college if they had professors or mentors who took an interest in them, if they got a paid job or internship, if they were active in extracurricular activities and organizations or if they held leadership positions.

The “college-for-all” movement has flooded institutions with students who decades ago would have landed in solid middle-class jobs without a degree. It’s no longer the guarantee to a good life it once was: plenty of students are following the advice of their parents and counselors, getting a degree, and still failing to successfully launch into the job market of this new economy. I love that the GPI index is digging down deep to draw out what really is key to a successful college career and how that affects people’s ability to prosper.

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