In his 2013 State of the Union address, President Obama said colleges and universities must emphasize “affordability and value.” He called for these concepts to be the standards against which institutions of higher learning are measured. One of the problems is that much of the discussion that goes on about college these days uses the terms interchangeably. While it is clear what affordability means in terms of college: can you afford to attend X university or do you need to consider Y community college; and what type of aid do you need and are you eligible for? These are today’s basic affordability questions.
“Value”, on the other hand, is a little more amorphous — especially when it arises in discussions about liberal arts and other, less career directed types of education. If you look at college guide books, or even suggestions from major news media outlets such as the New York Times, calculating the value of an education is a simple equation: future, post-graduation earnings less the cost of attending college. Elementary, right?
Yes — but not so simple. You could certainly make a valid argument that a non career-oriented education — say an English Writing degree, like the one yours truly has in a drawer somewhere — has its own intrinsic value, as well as value to society as a whole. You could also run it through the wringer of a straight cost-benefit analysis, and it may come up wanting; but even such an economic argument fails to capture all the economic nuances involved in financing a college degree. A simple cost-benefit analysis does not look at how much the value of a certain degree or educational program is affected by demand for that particular degree. The demand for a particular type of degree is affected significantly by the factors that contribute to the costs of getting the degree.
The affordable-valuable construct has fed another debate about college. Is higher education ‘worth it’? This blog has addressed this question on a handful of occasions, and from a few different perspectives. But maybe we’re barking up the wrong tree.
According to a report just released by Bellwether Education, it’s fashionable to question whether it’s really “worth it” for students who are at the margins both academically and financially to go to college. But, while the conversation continues at an abstract level about whether high school students should be focused on “college or career,” students are, one-by-one, all across the country, quietly making their own decisions, and they are choosing college.
In Smart Shoppers: The end of the “College for All” debate? from J.B. Schramm, Chad Aldeman, Andrew Rotherham and Rachael Brown, the authors point out that, thirty years ago, half of all U.S. high school graduates went to college (meaning any form of postsecondary education that leads to a degree or credential), and the other half went directly into the workforce. But today, seven out of ten high school graduates head to college, while only three enter the workforce.
Over time, as more students have attended and completed higher education, experts have repeatedly predicted this would create an over-abundance of college-educated workers. Under this theory, a glut of over-educated workers would struggle to find jobs and depress wages for everybody else. But the exact opposite has happened. Even in the recent recession, employers have voted with their payrolls and are more likely to hire college-educated workers, offer them full-time employment and benefits, and pay them more money than non-college- educated workers.
Beginning in the early 1980s, college-educated workers experienced a dramatic increase in their demand, and the college wage premium rose from 40 percent in the 1970s to upwards of 70 percent by the mid-1990s, and reached bit more than 80 percent in 2012.
The economic insurance that higher education bestows is not some kind of magic shield against job loss or hardship. But, through economic upturns and downturns, including the recent Great Recession, a college education remains the best insurance policy against shifting labor markets, unemployment, and under-employment.
The authors argue we face two real challenges looming in the future: 1) Schools must do a better job identifying those students who are not realizing their promise, a disproportionate number of whom are low-income; and 2) Schools, colleges, nonprofits, and businesses need to do a better job of educating students about their options on which college they should attend, which degrees they should pursue, and how they should pay for it. These aren’t arguments against college writ large but rather for thinking differently about college and preparing students to be smart about selecting the right institutions, taking on a manageable debt burden, and finishing their degree.
The report concludes with an analysis of the risks of college as an economic mobility strategy and a set of recommendations for K-12 schools, colleges and universities, state and federal policymakers, and business leaders.
It recommends supporting students to become smart, discerning shoppers of higher education information rather than assuming that the college experience is inevitable or interchangeable.