How useless are most college degrees?

Let’s focus on the outcome of matriculating, not just the value of the degree.
It is August. Swarms of freshmen are descending on our college campuses. There are three factors that will have a major impact on whether or not these young people will have a successful outcome:

 

  • You have to graduate. About sixty percent of those high school graduates who matriculate earn some kind of degree.
  • What is your major? Your choice of major influences your starting salary and the probability of you ending up under employed.
  • Are you part of the seventy percent who need student loans? The amount you borrow, as it relates to your starting salary, is going to have a big influence on your financial condition. Student loan debt also effects net worth. (See notes.)
Here are the outcomes for those who matriculate:
Outcome A 10% Get a job requiring a college degree, with no debt.
You should be in pretty good shape.
Outcome B 24% Get a job requiring a college degree, burdened with an average debt of $39,400.
How this is going to go, depends. If you are a school teacher making $40,000 with $39,400 in student loan debt, things are going to be tight. If you are a Computer Science major making $60,000 and looking at a bright job future with bonuses and raises, and you only have the average amount of student loans, you should be able to handle it.
Outcome C 8% Earn a degree, but end up under employed, with no debt.
You probably just wasted five years (average) of your life and a big chunk of your parent’s money.
Outcome D 18% Earn a degree, but end up under employed, burdened with an average debt of $39,400.
You could be in a lot of financial trouble depending on how much you borrowed.
Outcome E 12% Fail to earn a degree, but no debt.
You will be stigmatized in the job market (Drexel University study), but, at least, you don’t have any student loan debt.
Outcome F 28% Fail to earn a degree, burdened with an average debt of $13,800.
You will be stigmatized in the job market. (Drexel University study) Over half of these borrowers are making no payments on their loans.
Summary
Making college pay off these days is really difficult because of the imbalance of Supply (grads) and Demand (suitable jobs) and the outrageously high price tag.
However, forty-five percent of high school graduates are going on to college. (Forty years ago it was twenty-five percent.) Our colleges and universities welcome them and their parents’ money with open arms.
Most of these students do not have the linguistic and math skills combined with the necessary level of motivation to translate that learning opportunity into a suitable, well paying job. (One in four require remedial classes before they can even launch their college career.)
No one should be surprised that the outcome for many of these young people is going to be disappointing.

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