It’s no secret college is expensive and that countless students are struggling with student loan debt. The high costs and unaffordable loans have many wondering if college is even worth it. Turns out, despite all the negative press, college degrees are still a valuable investment and one that could earn you more than investing long term in the stock market.
A recent report by the Fed (Federal Reserve Bank of New York) indicated that the annual return on a college degree averages about 12.5%. Compare that to the average annual return of the stock market which has historically been about 10% and you’ll see that the ROI (return on investment) of a college degree can be better than that of the stock market.
Furthermore, census figures show that the median income for households headed by someone with a bachelor’s degree or higher was about $132,700, that figure is twice as much as those households, where the head of household only held a high school diploma.
Why Averages and Medians Don’t Matter
What do these numbers even mean if you just graduated and can’t find a job or are drowning in student loan debt. These figures represent all degrees collectively. Most people would agree it’s difficult to see the value of a college education with recent college graduate unemployment rates currently higher than the national average. Students are struggling to find jobs in their fields, jobs that pay well or even jobs at all, and it’s a source of stress, especially for students with student loan debt.
Statistics are fine to get a high-level gauge on something but don’t tell the whole story. The reality of whether a college education is valuable or not, is much more dependent on specifics related to the type of degree, what’s done with the degree and most importantly the person with the degree, than it is on the population as a whole and the averages and median figures representing millions of people in general.
The Type of Degree Matters
Colleges offer degrees that cover most any interest from Puppet Arts at the University of Connecticut to a degree in Rocket Science (officially Aerospace Engineering) at M.I.T. and everything in between. If you are looking to learn about an interest than there’s no shortage of opportunities. If you are hoping to get a job after college in the area of study you majored in, then some thought needs to be applied to the type of degree you pursue.
It’s important to not only consider what you like to do or what you want to do, but also what the marketplace needs and is willing to pay for that need. This will help you understand if the investment in a degree will pay off or not. Considering all the current interest in A.I., students with degrees giving them specific knowledge on how to develop or leverage A.I. technology might prove more valuable than those with a degree in say, Print Media since newspapers, magazines and printed books are slowly going away as they make way for online formats.
What’s Done with the Degree Matters
Even before you get the degree, you can start to put your educational pursuit to work. College students often have opportunities to participate in internships. Companies are usually willing to hire summer interns to help them gain experience during their years at school. Theoretically 3 internships can be completed by graduation, assuming you intern each summer while in college. This can help establish some experience in the field you are looking to enter and might even help land you a full-time offer before you graduate.
After graduation you need to be persistent and act with urgency. While a degree will forever tell a story of how you went to college and successfully completed a program, it does have an expiration date of sorts. Students can leverage their college degrees as differentiators initially when looking for work but soon employers will want to see more years of experience in a field, than those you spent obtaining your degree in it.
This means, don’t take a break after college. Don’t think that since you’ve gone to school for how ever many years, now is time to take a year or so off before beginning your career. When you decide to return, unless you have contacts that will open doors for you, you’ll find your classmates that went straight into the workforce are already inside and are now ahead of you, having accumulated valuable work experience that employers highly prize.
Ultimately the Person with the Degree Determines its Value
Regardless of what type of degree you have after college, what’s going to determine its value is going to be you. What might seem like a very specific and possibly useless degree like Puppet Arts could be quite valuable if you are someone like Jim Henson creator of the Muppets. Likewise, you might be a “Rocket Scientist” due to your degree in Aerospace Engineering but if you are working retail instead of a field related to your studies then that degree offers no value to you.
Degrees are meant to help give you a leg up in the career you want. They offer basic knowledge to help you get started. Attending college can help you find an internship and/or an entry-level job through the relationships schools have with some employers or through fellow alumni.
These things help you, but ultimately, at the end of the day it’s going to your tenacity, grit and perseverance that determine how you leverage your degree to help you achieve your career goals. Are degree’s more valuable than they get credit for, one could argue a resounding yes, if in the hands of the right people. Are they expensive – also yes, but return on investment is not a guarantee it’s a proposition. Until we appreciate what it can be instead of assuming what it will be, some may never realize it’s full value and potential.
