Though the U.S. finally emerged from the recession four years ago, the country’s job market has yet to bounce back. Job growth has been limited, and the jobs added in recent months have been part-time positions in low-wage industries, according to USA Today.
What’s more, studies have found that the current economic climate has been particularly hard on recent graduates. According to one Associated Press study, 53.6 percent of bachelor-degree holders under the age of 25 were jobless or underemployed in 2012.
A Rutgers University study found that of the recent graduates who entered the workforce from 2006 through 2011, only 50 percent of the jobs held required a four-year degree. In addition, the salary of a grad’s first job is around $28,000 annually, nearly $18,000 less than the average yearly salary of $45,790 of the nation.
With these depressing figures, we were lead to wonder — in this day and age, does the value of a degree merit the financial costs of going to college?
In a comparison, we looked at the annual cost of college for three top Ivy League schools in 1960-61 against today’s price, for 2013-14 (figures sourced through individual university websites). We’ve included the full college costs for one student, for one year, including tuition, room and board, living expenses, and books.
College Costs: 1960 vs. 2013
|School||1960-61||Inflated for Today||2013-14|
The difference in cost is astronomical. After an inflation adjustment, the college cost in 1960 is about $40,000-$50,000 less than today. However, many of the Ivy League schools have introduced generous financial aid assistance programs.
That aside, the drastic rise in college cost between 1960 and 2013 makes a compelling argument for the claim that higher education is now a business.
Many lesser prestigious schools than Harvard have marked their college costs up dramatically. For students attending those universities, the financial assistance funding is most likely smaller, leaving students no choice but to take out loans to cover their college costs.
For these cases, how many graduates find a job soon after graduating? How many of those jobs are in their desired fields? And how many of those pay enough for recent grads to begin to move out of their parents’ house, pay off their student loans, or even buy a car?
The truth is, the recent grad of today likely isn’t financially independent until years after they have graduated. According to the American Institute of CPAs:
- 40% of recent grads have put off purchasing a car.
- 29% have postponed home purchases.
- The average amount of student debt a college graduate owes is approximately $20,326.
On top of those discouraging statistics, the cost of living today is much higher than it was three to four decades ago, making it much harder for a college graduate to get the same value they used to with their degrees.
Cost of Living in 1960 vs. Now
|Commodity||1960||Inflated for Today||2012|
|Gallon of Gas||$0.25||$1.98||$3.51|
Additionally, the earning power of a recent grad with a bachelor’s degree is much lower today that it was five decades ago. A college degree signifies much less today than it did in the past, which is one reason why college graduates aren’t able to gain the same success as their predecessors.
According to The New York Times, until the early 1970s, less than 11 percent of the adult population had college degrees, and most of them were able to find decent jobs. Today, almost a third of the population has college degrees, earned mostly in non-elite schools.
These statistics explain why a bachelor’s degree no longer represents what it used to. This is one reason why we’re seeing so many jobs today that require prerequisites to being a potential candidates, mainly in the form of internships. Employers are looking for much more than a degree as an assurance of a valuable employee.
However, somehow almost 30 percent of Americans with associate’s degrees are now out-earning those with bachelor’s degrees, according to Georgetown University’s Center on Education and the Workforce.
How can this be explained? According to the College Board, a two-year community college degree costs on average, $6,262, whereas a bachelor’s degree from a four-year, private residential university averages at $158,072. Right off the bat, those going into community colleges are making a much less costly investment in their higher education.
Additionally, there is a high demand for people with “middle-skills” that don’t require more than an associate’s degree, such as computer engineers, paralegals, teachers in early childhood programs, and lab technicians.
There is an argument to be made that many employers want professionals who graduate with skills, not just education. Regardless of whichever way you slice or dice it, the traditional four-year college degree isn’t guaranteeing the same kind of financial security it once did.