John Ebersole (Forbes)
A recent article in a national newspaper raised the question as to whether earning a bachelor’s degree, or even an associate’s degree, is really necessary for employment today. Several examples were given of individuals who had succeeded in securing jobs, with little more than a high school diploma and specialized skill training gained either on the job or through short-term career prep programs. Cook, mechanic, welder, and several types of craftsmen were cited as “proof” that one does not need a degree to gain a well paid position. Others have pointed to the likes of Bill Gates and Steve Jobs as examples of success without sheepskin.
At a time when the cost of college has grown faster than health care; recent graduates are struggling with tens of thousands of dollars in student loan debt and many of those who have earned a degree are struggling to find work; it is understandable that some are starting to question the cost/benefit of such a credential. Are these skeptics wrong?
Possibly. However, as with most things in life there may not be a simple yes/no right/wrong answer. Let’s look more closely at both the cost of a degree and the average return for those who attain. Also, let’s look at whether a degree makes any difference in finding a job. Finally, we will examine more closely some of the alternatives to earning a degree.
According to a June article in USA Today, “Penn State has the highest in-state tuition for a four year public university at $15,250 during the 2010-11 school year. When the costs of room, board and other expenses are factored in, the total rises to $19,816…” A recent graduate, goes on to say that his total tuition for four years came to about $50,000. To cover this, he took out some $25,000 in student loans. In looking ahead, it would appear that future Penn Staters are looking at $20K per year, all inclusive, or $80,000 for a degree.
While certainly not cheap, it is a far cry from the $200,000 degrees that we read about from the Ivy League schools. These eight schools are the most often cited as examples of the uncontrolled costs in higher education, yet they educate but 0.4% of undergraduates and see their applications increase with every rise in tuition (high price equates to high quality, yes?). The median cost of a four-year degree in-state at a public institution is about $16,000 per year, or $64,000 overall.
What does a $64,000 investment return in dividends? According to the Bureau of Labor Statistics, not only is there a $400 per week difference in earnings between those with a high school diploma and those with a bachelor’s degree, there is also a substantial difference in unemployment. As of the end of 2011, high-school only workers were unemployed at a rate of 9.4% while those with a bachelor’s degree had an unemployment rate of 4.9% (4.1% as of July 2012). Most interesting is the fact that the total cost of degree acquisition ($64,000) is repaid through the increased, salary ($1600 per month, or $19,200 per year) in less than four years. Not a bad ROI, and with a 50% increase in job security to boot. The difference between a degree holder’s earnings and those of a high school-only worker are sizeable over a lifetime. According to the U.S. Government Info Web site, “… a high school graduate can expect, on average, to earn $1.2 million; those with a bachelor’s degree $2.1 million; and people with a master’s degree $2.5 million.”
Now, lets look at some of the alternatives mentioned earlier. The average salary by vocational choice is as follows:
Vocation National Average Salary
Cook $28,570
Welder $37,000
Auto Mechanic $33,934
Landscaper $30,000
By comparison, the holder of a bachelor’s degree has an average starting salary of $45,000 (all data taken from the Web site statistics).
While not intending to disparage anyone’s career choice, the facts are that someone with a college degree is statistically more likely to have a higher salary than someone who doesn’t and is also more likely to have more job and promotion opportunities.
Does this mean that I must have a degree to succeed or that a degree guarantees me a high paying job? The answer to both is “of course not”. In my own case, I did not have a degree of any kind until 20 years after graduating from high school. Yet, I moved from enlisted to officer status during that time, commanded two ships and completed a military career.
As for guarantees – there are none, with the possible exceptions of death and taxes. However, you can definitely shift the odds in your favor by attaining a degree. In the process, you may also learn that education isn’t just about earning a living. Through education we enrich our culture, create greater societal understanding and unity, become more knowledgeable citizens and add to our quality of life and, a democracy doesn’t work well without it.
