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Yes – a College Degree Is Worth It

Worth It? Worthless? Worth Less?  All three questions need answered as you make decisions about your future. These questions are important because confusion aboundsBuzz Today Source: Chronicle of Higher Education   “As of April, 2014, the unemployment rate for college graduates ages 25 to 34 was 3 percent. The wage premium for people with bachelor’s degrees has been rising steadily since 1980 and now stands at 98%* …With regard to student debt, only 2% of students owe more than $100,000 while 43% of student borrowers owe $10,000 or less. College is not only still a good investment, it is the best investment you can make”.  *This means that bachelor’s degree holders have nearly twice the income of high school graduates.

The data in Buzz Today unambiguously answers the first question: Worth It? If you want to have a better chance to get hired and earn twice the income get a bachelor’s degree. The data show that people with bachelor’s degrees are more likely to get a job and, when employed, make almost twice as much on average as those with only a high school diploma. Does this data mean that you will be guaranteed a job making twice as much as you would  have made without the bachelor’s degree?  No. There are no guarantees in life. A college education is no exception.

This brings us to the issue of Worthless. College degrees are awarded in different disciplines. This means that merely getting a degree is not enough. What you learn while earning a degree and, to a much lesser extent where you learn it, matters a great deal.

So here are two scenarios that relate directly to the Worthless issue. First, if you start out to complete a bachelor’s degree and fail to complete your bachelor’s degree (which about 54 million Americans are doing today), your investment is not completely worthless but it is pretty close. The compensation difference in BUZZ Today is based on those who actually have their bachelor’s degree. Taking some courses may make you smarter but having the degree is a way for employers to decide whether you are a candidate for their open jobs. Completing the degree is very important in the job market place.

The other way that you can create a worthless (i.e. a significantly less valuable outcome) is to earn a degree where there are no jobs that require the knowledge gained during your studies. Here the professors passionately argue that an education is about more than money. I agree. Worth is a big concept than money. But for now the Worthless conversation is about the economics of your degree efforts.

The Worthless question is not about you, the school you attend nor how much smarter you are. The Worthless question is about whether an employer will pay you an attractive salary for the knowledge and shills you have. The fact is that it is possible for you to earn a degree where there are no open positions to fill. In this case there simply is no demand for the knowledge you have acquired with your bachelor’s degree. This may seem unfair, short sighted, cruel or any number of other negative descriptors. In the end it is still a fact. Employers are not going to pay for knowledge they do not need. Period.

The last item in this Worthless conversation is my advice to you. If you are truly interested in what your degree will be worth in the job market do your research on job opportunities before you enroll. To get that job market information go to O*NET and do your research. Your Future is Calling guides you on how to use that valuable data.

The last question is about Worth LessWorthless is about employers and jobs. Worth Less is about you. Here is how to look at this question. In an earlier Learn Prosper blog titled “Careers Begin with What You Learn” I shared that two thirds of employees under 30 are still searching for the right career and intend to switch careers within two years. This data show that for a large number of our young, the choice they made has been worth less to them. What they studied failed to get them into the “right” career for them.

But the issue about Worth Less is not merely about a career. This issue is about how well the area of study in your degree program fits “who you are”. This is about degree fit with you. For example, if you are passionate about teaching a career in that field is what you want to do in life. The fact that you will earn less is not relevant to the issue of worth less. In fact, becoming a teacher when it fits “who you are” is worth more to you than becoming an investment banker where you have the potential to earn far more. In this example, becoming an investment banker is indeed worth less to you. The point is that it is not all about money.  But to keep your bachelor’s degree from becoming worth less you have to know a great deal about “who you are”. This issue is not about jobs and salaries. This is about you. To learn about how to find out “who you are” go to the first chapters of Your Future is Calling. Some work there can help you make sure that your degree is not going to be Worth Less to you. No one else; not me, not employers, not professors, not your parents matter in this part of the Worth discussion. This is about you.

Go for it. The tools and information to answer the Worth questions are available. You just need to learn where they are and how to use them.

What You Need to Know About the Value of Education

We know a lot about the cost of an education. It costs too much. Here are some other things we know about education. Growing student debt is a student problem that is rapidly becoming a threat to growth of our economy. These issues are getting a lot of attention these days. In contrast, there is little good information about the value of an education today. This post is devoted to the value indicators.  Buzz Today Source: Pew Research Center “The Growing Economic Clout of the College Educated.”College-educated households are the only households whose incomes have grown on a per household basis from 1991 to 2012. There are a number of factors at play in boosting the household incomes of the college educated relative to less-educated households. A primary factor is the better fortunes of the college educated in the labor market. The Georgetown Center on Education and the Workforce finds college graduates earn nearly twice as much as workers with just a high school diploma.

Value Proposition number 1: Education is the key to upward social mobility. Research shows that it is possible to move up in society – with an education. Source:  Federal Reserve Board of San Francisco: A college education can counter the effects of birthright. Only 5% of children born into the bottom quintile (lowest 20%) who don’t graduate from college end up in the top quintile (top 20%). By contrast, 30% of bottom-quintile children who graduate rise to the top quintile (from the bottom 20% to the top 20%). This is clear evidence that a college education is key to the American Dream of having a better life than one’s parents.

Value Proposition number 2: College favorably impacts skills that are important to compete in our modern global economy.  Source: “How College Affects Students: A Third Decade of Research”. All of the following critical skills were found to have statistically significant improvement as a result of a college education. The list includes:

Verbal skills    Quantitative skills     Speaking skills      Written communications     Critical thinking skills      Conceptual complexity.

A survey of employers shows that employers are looking for these very skills.  A report from the American Association of Colleges and Universities  provides data from a January, 2014 survey of 318 corporate executives showed that 93% of those responding agreed that “a demonstrated capacity to think critically, communicate clearly, and solve complex problems” is more important than the skills of the candidate’s undergraduate major.  And 75% of those surveyed said they want more emphasis on critical thinking, problem-solving, written and oral communications and applied knowledge.  And 95% said they want new hires to demonstrate ethical judgement, integrity and the capacity to continue to learn.

Value proposition number 3: College educated households are the only one’s with growing household incomes. All other levels of education have actually declined.

Household Income (2012 dollars)

Education                                  1991              2012             Percent change

Less than high school             $33,959       $32,631                 -4%

High School                                 54,707         52,199                  -5%

Some College, no degree           66,038        63,008                 -5%

Associate’s                                    72,407        68,902                  -5%

Bachelor’s                                     92,289       100,637                +9%

Master’s                                        104,193      114,897               +10%

Professional                                 150,869       180,671               +20%

Doctorate                                      131,365       150,087               +14%

Source:  Pew Trust Research

When you look at the difference between the income for Some College, no degree and the income of a Bachelor’s degree you can see why it is so very important for those with some credits but no degree to complete their college education and graduate.  The difference in income is worth, on average, over $37,000 each year. There are about 38 million Americans in this position.  The irony is that with wise choices, it could cost as little as another $25,000 to complete that degree. Doing that would be of immense value when the value created every year is much more than the total investment.

The cost of an education is pretty clear. The value of an education is less clear. And least clear of all is how to get the value of an education without incurring the high costs that are so widely reported these days. For the latter, see Your Future is Calling for exercises and valuable data.

Three Reasons a Degree is Important

“Is a College Degree Worth It?” There are three important reasons the answer is almost always Yes.

A degree is a credential, it communicates important information to the external world. The first reason credentials are important is because employers screen and select new employees based on the credential. Automated resume screening software screens job candidates before an interview. The second reason is one we have explored before. On average, each progression of  accredited degree (Associate’s, Bachelor’s, Master’s, Professional/Ph.D.) produces more life time income than the degree immediately below it. This is true even though some associate’s degrees produce higher income than some bachelor’s degrees.  The third important reason has to do with the motivation of the learner. This last one is about you – as in Your Future is Calling. This is the reason we will explore in depth here in what I call the lessons of CS50/CS50x at Harvard University.

Buzz TodaySource:  David J. Malan CS50 blog: I am a Senior Lecturer on Computer Science at Harvard University I received my A.B., S.M., and Ph.D. in Computer Science from the same in 1999, 2004, and 2007, respectively. I teach Harvard College’s introductory course, Computer Science 50 otherwise known as CS50. In October 2012 Harvard launched a MOOC called CS50x. 150,349 students registered to take the course online. 1,388 or .9% of the original registrants received a certificate of completion for taking the course.

The data in the BUZZ Today documents the level of completion of the MOOC number CS50x offered starting in October, 2012 from Harvard University. The percentage of enrollment that received a certificate of completion was .9%. CS50 is the core course offered on the Harvard campus to students enrolled in degree seeking programs at this prestigious University. During the fall of 2012 there were 706 Harvard students enrolled in CS50. Of those 706 originally enrolled, 703 or 99.6% completed the course.

With so many nines floating around it may be confusing. The results for completion are .9% vs. 99.6%. Just to be totally clear, this is something under one percent vs. nearly one hundred percent for the same course from the most famous University in America. What does it mean?

Clearly it is not about the commonly referenced issues of course content, college reputation, faculty status/capability or time of the year. It is the same course, the same university at the same time. I will assert that what is different is the student doing the learning and more specifically the motivation of the students enrolled in the MOOC CS50x versus the motivation of the on campus student enrolled in CS50.

Here is the specific conclusion relative to the headline that the degree is important. The most important distinction between the students enrolled in CS50x, the online MOOC and CS50, the Harvard University campus course, is that all of the students on campus were students enrolled in a degree program. They were degree seeking students. In contrast, none of the students enrolled in CS50x, the online MOOC were degree seeking students. CS50x does not award college credit. By design, completion of CS50x online does not qualify for credit toward an accredited degree. There is one other important distinction between CS50x and CS50. The campus based CS50 students actually paid thousands of dollars of tuition to be enrolled while the CS50x MOOC students enrolled for free.

So the key comparisons are:

CS50x – Free MOOCM .9% completion
CS50 – Tuition paying and degree seeking 99.6% completion

This is the same course from the same institution taught by the same faculty member. One is online and one is on campus. All of those who enrolled in CS50x knew it was online before they registered.

It’s clearly not about the cost, the content, the fame of the faculty member, nor the reputation of the institution. These are all factors frequently cited as differentiators. I assert that it isn’t even about the quality of the students attending even though Harvard’s highly selective admission policies are designed to assure high quality students. On a pure random basis, with 150,349 registrations for a Harvard course there had to be tens of thousands with the intellectual capacity of those attending CS50 on the Harvard campus.

There is only one defensible inference to be drawn from this gigantic .9% vs. 99.6% gap. The implication has to be that the campus based students were motivated to complete while the online CS50x students had no comparable compelling purpose to complete the course. The investment of the campus students represented a step toward an important credential – in this case, an accredited Harvard University degree. For the online MOOC students this was just another course out of thousands available.

And it is with this evidence that I share the third important reason for earning a degree.  This third reason is about you, the learner. The credential, that is, the degree itself is a powerful motivator to do the work to learn and prosper from the effort.

Oh, by the way, I think this data has important implications for the outlook of MOOCs as the disruptive force in higher education. I will let you draw your own inferences about this issue. My belief is that MOOCs as they are constituted today will not displace the higher education as we know it.