Why the Cost of College Is Still Well Worth It
In his recent article in Texas Monthly on the University of Texas and Texas A&M, Paul Burka outlined several criticisms leveled by reformers at higher education.
Let me mention just a few: The street value of a college degree is up for debate; the job options for college graduates are limited; and students are left with huge debts upon graduation. While Burka is correct that, at least in some quarters, there is an “existential debate” about the cost versus the value of a college education, these arguments don’t hold water.
The street value of a college education is high: Estimates of the median lifetime earnings of a college graduate are from $570,000 to $964,000. Gary Burtless of the Brookings Institution reported that the return on investment for college over the last 50 years is 15.2 percent compared to 6.8 percent for the stock market, 2.2 percent for long-term Treasuries and 0.4 percent for housing.
Job prospects for new graduates are not as rosy as they were before the Great Recession, but they are not as rosy for anyone. In a terrible job year, 2010, Burtless reported that 88 percent of recent college graduates 23 to 24 years of age were employed, compared with 64 percent for high school graduates. Over the last 40 years, the fraction of men with a high school diploma who are employed declined 21 percentage points. The decline for college graduates was three percentage points.
Sandy Baum, an independent policy analyst for the College Board, has estimated that nationally two-thirds of students borrow for college. The average debt of those who borrow is between $20,000 and $25,000. A recent study of student debt by the Federal Reserve Bank of New York found that almost three-quarters of those with debt had less than $25,000 debt.
That is, most students who graduate with debt will spend more on their first new car than they owe in student loans.
The students with debt of more than $100,000 are only 3.1 percent of all students with debt. But these are the students who get all of the newsprint. They do not represent the situation of the typical college student.
Hopefully, we can move on to a discussion of ideas to improve higher education, ideas that will come from within and from without. Questioning the value of higher education is a disservice to our young people.
College does not guarantee a job, but it is way ahead of whatever is in second place.
Ahlburg is president of Trinity University, a private liberal arts college in San Antonio. This article first appeared in the Houston Chronicle.
Photo by VoxLive via Flickr Creative Commons.
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