With rising tuition and student loan debt, there has been growing debate over the value of a college degree. Is it worth the cost?
Former Education Secretary William Bennett is on the side of those who say it isn't. His 2013 book “Is College Worth It?” argues that only 150 out of 3,500 U.S. colleges and universities provide an education that is worth the investment it requires. He points out that nearly half of those who start a four-year education drop out.
But a new survey of young adults, members of the Millennial generation, suggests that the expense and time investment is worthwhile. The Pew researchers surveyed 2,000 young adults and supplemented it with an analysis of U.S. Census Bureau economic data.
Across the board
“On virtually every measure of economic well-being and career attainment — from personal earnings to job satisfaction to the share employed fulltime — young college graduates are outperforming their peers with less education,” the researchers conclude.
The survey also compared today’s young adults with previous generations at the same age. It found the disparity in economic outcomes between college graduates and those with a high school diploma or less formal schooling has never been greater in the modern era.
For example, the economic analysis finds that Millennial college graduates ages 25 to 32, who are working fulltime, earn more annually — about $17,500 more — than employed young adults holding only a high school diploma. The pay gap was significantly smaller in previous generations.
Better shot at fulltime job
College-educated Millennials are also more likely to be employed fulltime than their less-educated counterparts, but only slightly more – 89% vs. 82%. But are college-educated Millennials really that much better off? Another Pew study, from 2012, may cast some doubt.
That study found an increasing number of young adults living at home with their parents. According to the analysis of Census data, a record 21.6 million, or 36%, of 18- to 31-year-olds were living at home. That figure was the highest percentage recorded in at least four decades, and represents a slow but steady increase from the 32% share living at home before the Great Recession.
Maybe the Millennials living with Mom and Dad are the ones who didn't go to college. No doubt some are, but the Pew research doesn't specifically address that question. It does note that, of the 21.6 million Millennials living in their parents’ home in 2012, at least a third and perhaps as many as half are college students.
Graduates think it was worth it
The latest Pew study finds that among employed Millennials, college graduates are significantly more likely than those without any college experience to say that their education has been “very useful” in preparing them for work and a career. Better educated young adults are more likely to say they have the necessary education and training to advance in their careers.
Millennials, age 25 to 32, believe by an overwhelming majority that their college degree has already paid off. Even those who had to borrow money to attend school feel that way.
The point of the study confirms it is still a very difficult time to be entering adulthood, with fewer jobs and greater competition to get them. But the researchers conclude it may not be that a college degree today is worth so much more, but that a high school diploma is worth so much less.
For example, in 1979 when the first wave of Baby Boomers were the same age that Millennials are today, the typical high school graduate earned about three-quarters of what a college graduate made. Today, Millennials with only a high school diploma earn 62% of what the typical college graduate earns. They may be worse off than their college-educated peers, but neither is doing all that well.
“To be sure, the Great Recession and the subsequent slow recovery hit the Millennial generation particularly hard,” the researchers conclude. “Neither college graduates nor those with less education were spared.”