Is College Still Worth It?

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paying for a college degree

paying for a college degreeOne of the debates raging right now in the world of personal finance is the debate over whether or not paying for a college degree is worth it.

A recent analysis of the job market for recent college graduates by the New York Federal Reserve indicates that many young people are underemployed. According to the report, “the qualify of the jobs held by the underemployed has declined, with today’s recent graduates increasingly accepting low-wage jobs or working part-time.”

While the report also insists that recent grads have always had trouble adjusting to the labor market after school, it does give a nod to the changing employment environment, especially since the recession in 2001 following the bursting of the tech bubble and the Great Recession associated with the financial crisis of 2008.

These sorts of reports, paired with the fact that the cost of attending college continues to rise, have many people wondering if college is still worth it. The answer, as one might expect, is deeply personal. The Fed report indicates that, for all the difficulties that recent grads face after finishing school, they are still better off than those who don’t attend college at all. 

But what are some of the other factors that go into whether or not schooling is worth it? According to Dr. Amy B. Hollingsworth, the Natural Science Biology Lab Coordinator at the University of Akron, and the founder of The Seven Minute Scientist, a lot of it has to do with what you decide to study, and your reasons for attending school.

Do You Have a Plan for Your Schooling?

“Many people unfortunately go to college because they see free money, and think they can live on that money, take some classes to get a degree, and get a better job,” says Hollingsworth. She points out that the “free money” that many students think they are accessing is actually student loan money.

“In reality,” Hollingsworth continues, “they are racking up debt, wasting time, and are incapable of doing the work. I’ve seen an anthropology major rack up $250,000 in loans, and now is an adjunct professor with no benefits.”

That’s not to say that any social science degree is useless. However, it’s important to consider your reasons for attending school, and pinpointing the type of degree you want, and what you plan to do with it. As a result, you might end up spending too much for a degree that doesn’t offer you much in terms return on your investment.

If you decide to go for a degree that won’t allow you to earn much after you finish school, it makes sense to attend a school that is less expensive, so that you don’t have as much debt.

What Degrees Pay Better?

“Many professions where you don’t learn something specific aren’t worth it,” Hollingsworth says. She points out that many general degrees that don’t come with specialized knowledge that makes you marketable and valuable when you finish. “Picking a profession like finance, business, or any of the STEM majors is worth it.”

STEM, or science, technology, engineering, and math often offer the most bang for your education buck. These are majors that often allow you to get a decent-paying job fairly soon after graduation, in fields that are in demand. Plus, the practical skills you gain in these majors mean that you are ready to do a competent job in your field.

By contrast, many of the more general majors might require that you go on to earn an advance degree — racking up even more education debt — if you want to find a job that pays better. Thinking through the realities of your job prospects can help you avoid expensive mistakes with your education.

Where You Go Matters, Too

Another consideration is where you get your education. There are a lot of ads claiming to help you get a degree online. While there are some reputable programs that offer online degrees, the majority of these programs are for-profit schools that are very expensive. The degree you receive may not be as respected as a degree from a state school, or a well-known and respected private institution.

“Most for-profit schools are not worth it,” says Hollingsworth. “They are designed to extract federal money for teaching the poor, or those who can’t get into a ‘real’ college, and they provide almost nothing in return.”

Steve Palley, the CEO and co-founder of ApplyMap, a website that helps high school students apply for college, agrees. “Not all college degrees are created equal,” he says. Palley goes on to point out recent data that indicates that the top three-quarters of college graduates will earn significantly more over their lifetimes than non-graduates, will the bottom quarter of college grads will do no better than non-graduates.

“So, how do you avoid falling into that bottom quartile of graduates?” he says. “The answer boils down to a mix of three factors: academic major, academic performance, and the reputation of the school you attend.”

He points out that having a plan, based on where you go and what you study, is the best way to ensure that your college degree is worth what you pay for it. “If you earn a degree from an elite institution like Harvard, Stanford, or UCLA, your degree is likely to be worth the cost over the long run, even if you are a poor student in a major that offers few job prospects.”

If you don’t want to pay the premium price, though, Palley has another suggestion. “If you do reasonably well in an engineering or computer science major at a less well-regarded school, you will be even more employable and probably carrying a lot less debt!”