Ray’s Take The struggle recent graduates have had finding jobs has many people wondering if college is still worth the expense. According to some reports, it is. Consider this recent finding by the Lumina Foundation and Georgetown University’s Center on Education: The unemployment rate for college graduates is 6.8 percent, but it’s nearly 24 percent for those with only a high school diploma.
That’s just part of the story, however. Other reports indicate that a huge percentage of recent graduates are actually underemployed – working at jobs where no college degree is required. In fact, when you add their numbers to the unemployed, it takes in half of all new graduates.
However, this could be a short-term hiccup caused by a sluggish economy. College graduates still tend to earn some $1.3 million more than those without a degree over their lifetimes.
On average, college degrees are worth it, but not all degrees are equal. Considering how college costs have soared, what you study and where you study it factor in more significantly than ever. Where just getting that degree used to be enough to open doors, now it’s what you actually learned that matters. According to a book by Richard Arum and Josipa Roksa, more than a third of college graduates actually gain no measurable skills from their college education. These grads were counting on the value of that diploma alone to launch their career. That’s simply not enough anymore.
College is still vastly important to building a career that leads to financial security. However, it’s important that college students not only commit large sums of money, they must also commit themselves to gaining the knowledge and skills the marketplace needs.
Dana’s Take That Lumina/Georgetown study Ray referenced turned up another interesting statistic: Many associate’s degrees produce better average earnings than some bachelor’s degrees. Even a vocational educational certificate can produce higher wages, especially if that training is in science, technology, engineering or mathematics. Plus, the student loan burden is much lighter.
For many young people, attending a community college could be a better way to start their higher education. To start with, these colleges are typically less than half the cost of a four-year university. If a student realizes he or she wants to change their area of study (and many of them do), the financial setback is not nearly as great.
Of course, these shorter educational programs can still lead to a bachelor’s degree at a four-year university. Many times that is the case. The difference is that the student moving on most likely has a better understanding of a chosen career and a stronger commitment to achievement. Plus a smaller financial burden to bear. That makes an accredited, reputable community college a money-smart choice for many families and their high school grads.
Ray Brandon is a certified financial planner and CEO of Brandon Financial Planning (www.brandonplanning.com). His wife, Dana, has a bachelor’s degree in finance and is a licensed clinical social worker. Contact Ray Brandon at email@example.com.