College: Expensive but worth the cost?

The News York Times has a good story today on the fact that even workers with jobs are struggling because they are underemployed. The story opens with an Atlanta woman at a job fair; she has a job but her hours and her pay has been cut and she can’t make ends meet.

But what is applicable to our discussions are these two points addressed in the news story: College tuition has been rising faster than inflation or salaries and college grads are still faring better in the job market that those without degrees.

According to the story:

Expenses like putting a child through college — where tuition has been rising faster than inflation or wages — can be a daunting task. When Morgan Woodward, 21, began her freshman year at the University of California, Berkeley, three years ago, her parents paid about $9,000 a year in tuition and fees. Now they pay closer to $13,000, and they are bracing for the possibility of another jump next year. With their incomes flat, though, they recently borrowed money to pay for her final year, and to begin paying the tuition of their son, who plans to start college this fall.

“You know there is going to be small incremental increases in tuition, but not the 8, 10, 12 percent increase every year we’ve seen,” said Ms. Woodward’s father, Cliff Woodward, 52, who lives in Pleasanton, Calif., and is an independent sales representative for an eyeglass company.

People with college degrees still get jobs with better pay and benefits than those without, but many recent college graduates are finding it hard to land the kinds of jobs they had envisioned.

Garland Miller, 28, who has degrees in finance and accounting from the University of Georgia and Kennesaw State University, had hoped to land a job at a big accounting firm, and to have been able to buy a home by now. Instead he finds himself working as the lead server at a steakhouse. But he has not given up on trying to move into the field that he prepared himself for: This month, he attended a jobs fair in Duluth, a suburb of Atlanta, organized by the University of Georgia for its alumni.

“I’m not in a job where I’m using all of my skills,” Mr. Miller said. He said that with many baby boomers unable to retire as early as they had hoped, there are fewer opportunities for younger workers to move up and take their places. “Instead you have everybody competing for entry-level positions,” he said.

Things are much worse for people without college degrees, though. The real entry-level hourly wage for men who recently graduated from high school fell to $11.68 last year, from $15.64 in 1979, according to data from the Economic Policy Institute. And the percentage of those jobs that offer health insurance has plummeted to 22.8 percent, from 63.3 percent in 1979. Though inflation has stayed relatively low in recent years, it has remained high for some of the most important things: college, health care and even, recently, food.

–From Maureen Downey, for the AJC Get Schooled blog

39 comments Add your comment

About higher ed ...

June 19th, 2012
11:29 am

As the Heritage Foundation points out, over the past few decades, a vicious cycle has been perpetuated by federal education policy: The Department of Education increases subsidies for college, inflating students’ purchasing power, in turn allowing universities to raise tuition, which ultimately increases the demand for more government subsidies.

Nothing proposed by the Obama administration, of course, would break this vicious cycle nor place pressure on universities to use resources more efficiently. The dysfunctional higher education market is an “arms race” where vast resources are targeted toward non-academic purposes such as athletics, building renovations, and administrative overhead costs in order to compete for students.

Perhaps most troublesome of all, continuing to increase federal subsidies for college raises questions of equity. Increasing federal subsidies for higher education—whether in the form of Pell grants or student loans—shifts the responsibility of paying for college from the student, who directly benefits from college, to the taxpayer. Transferring the burden of student loan financing from university graduates—who earn on average twice that of someone with a high school diploma—to the three-quarters of taxpayers who did not attend college is unjust.

NTLB

June 19th, 2012
11:38 am

It’s only worth the cost if you earn a medical, nursing, or engineering degree. Not worth it if you teach. Plumbers are making more than educators. Lawyers are struggling economically also.

Georgia’s college graduates need to look out of state. I personally know many Hope recipients that have had to move and work out of state with the degress they earned for free in Georgia.

Georgia’s brightest and talented are not for hire here.

catlady

June 19th, 2012
11:43 am

Sounds EXACTLY like the Heritage Foundation spiel.

Unless you are really special, you repay those amounts supposedly “transfered to the taxpayers who did not attend college.”

And those who complete college generally become higher-tier taxpayers whose taxes also repay the Pell.

Does the Heritage Foundation think college should be limited to the Already Haves?

IF we agree that education is useful to the society as a whole, we support helping students get a college education. IF we believe that college is ONLY for those who already have a lot, then we follow the thinking of the Heritage Foundation.

Shar

June 19th, 2012
11:53 am

Colleges and universities that raise their total cost of attendance (tuition, fees, room, board, etc.) above the rate of inflation should not be eligible for federal grants or scholarships. Same for those that fail to graduate at least 60% of their students in 5 years. Those institutions are draining tax resources while saddling graduates with unsustainable debt that will hamper their post-graduate options. They undermine the national good rather than support it and they should therefore be required to go it alone.

The federal money also subsidizes the states, which have cut funding for higher education as a tactic for drawing higher levels of federal aid into their systems through inevitable compensatory tuition increases. Georgia is a poster child for this sleight of hand.

A college education is supposed to provide a student with a broad base of knowledge that will enable him or her to contribute to the workforce with innovation and productivity. It is not supposed to be a vocational path per se. However, with the job market demanding specialization and the costs of college so incredibly high, making college ‘pay’ necessitates foregoing that broad exposure across areas of knowledge in favor of marketable degrees.

JD

June 19th, 2012
11:58 am

Wait — from my conservative friends I understand that anyone making less than $50,000 pays 0 taxes. Both conservative and liberal think tanks agree that the avg income of individuals who do not attend college is below 30,000 — and they do not pay taxes. So, if you pay taxes, it is likely you attended college.

Reason # 91 why college education should be affordable — we need somebody to pay the bills

Truth in Moderation

June 19th, 2012
12:08 pm

“Garland Miller, 28, who has degrees in finance and accounting from the University of Georgia and Kennesaw State University, had hoped to land a job at a big accounting firm, and to have been able to buy a home by now. Instead he finds himself working as the lead server at a steakhouse. But he has not given up on trying to move into the field that he prepared himself for: This month, he attended a jobs fair in Duluth, a suburb of Atlanta, organized by the University of Georgia for its alumni.”

I know of a 25 year old who went to work for a certain big box store right out of high school and moved into low level management, with an enviable health insurance package (including eye glasses and dental). He just purchased a 3,000 sq. ft. SIX BEDROOM, 4 bath NEW home in a swim /tennis near Braselton for $140,000. To top it off, he has two roommates who will help pay down his mortgage. He was able to put over 10% cash down. If you are hardworking and frugal, non-college grads can do well, even better than a college grad with an inflated degree in a no demand industry.

the prof

June 19th, 2012
12:21 pm

60% grad rate would be easy to reach if you put reasonable requirements on admission, such as ability to read, write, and do arithmetic…..

NTLB

June 19th, 2012
12:39 pm

@Truth in Moderation—Ditto!

Common sense and life skills are indispensable, but are not part of the standards or the curriculum.

Progressive Humanist

June 19th, 2012
12:58 pm

Of course, Truth in Moderation (or Delusion in Abundance) brings us an anecdotal observation (n =1) that we are supposed to generalize to all of society. Great thinking skills there.

the prof- Yes, 60% is attainable if we tighten admission requirements. If not, and the funding is tied to that number as suggested, and current evaluation methods are kept in place (students grade professors), then we’ll see grade inflation like we’ve never seen before, and we’ve already got it.

William Casey

June 19th, 2012
2:01 pm

TO ALL THOSE KNOCKING THE VALUE OF A COLLEGE EDUCATION: Personally, I’m very pleased that my heart surgeon attended college.

There are many paths to success. They ALL require hard work.

I’m very pleased with my investment in my son’s education. He’s a senior at Georgia Southern and the changes I’ve seen in four years have been extraordinary. He’s not only prepared for employment, he’s a better person. Money well spent.

William Casey

June 19th, 2012
2:06 pm

To paraphrase the old saying about races and the swiftest: “A college education doesn’t guarantee success but that’s the way to bet.”

Educator

June 19th, 2012
2:39 pm

All this talk about whether a college education is worth it makes me dizzy. Obviously one can be successful or not-so-successful, with or without a college education, but stats over a long period of time clearly show that lifetime earnings typically rise with each additional level of education. For example, high school grads make more than dropouts and college grads make more than high school grads.

Having said that, all students don’t need to go to college. However, in Georgia technical schools became colleges a few years ago because it was presumably more appealing for students to attend “college” than to attend “trade schools” or “technical schools”. So, now all students can go to college. As a result the taxpayers of Georgia are paying for duplication of collegiate programs. They were already paying for duplication since Georgia public schools lowered standards to get the high school grad rate up. Students are graduating, but they can’t read, write or do arithmetic so that developmental courses in college. This is simply a “redo” of middle and high school.

As for the rising cost of college don’t forget that during recent years when Georgia’s public colleges raised tuition and fees the State reduced higher ed funding by 25 to 30%. Another factor in college cost is the false economy that has been created by HOPE and loose federal financial aid and student loans. These have created false demand. Any time demand grows more rapidly than supply, cost will rise.

I fear that excess higher ed capacity has been built in recent years. The USG has expanded. The TCSG is no longer satisfied with a technical education mission; they want in the “college” game as well. In the end we (the tax payers) will pay, not once, not twice, but three times, or more. Too much capacity. Too little HOPE! And when the students don’t pay back the student loans, we’ll bail them out.

Lee

June 19th, 2012
5:02 pm

“People with college degrees still get jobs with better pay and benefits than those without….”

A well-worn quote, often used by everyone from high school guidance counselors to college marketers, to educational blog mistresses (Madams?). What they don’t tell you is that those who attend college typically come from the top 25% of high school students and would do well whether or not they attended college. Especially so when contrasted to the bottom 25%….

Even so, as @WmCasey said, if I’m hedging my bets….
———————————-

“Garland Miller, 28, who has degrees in finance and accounting from the University of Georgia and Kennesaw State University, had hoped to land a job at a big accounting firm, and to have been able to buy a home by now. Instead he finds himself working as the lead server at a steakhouse…”

The “Big 4″ accounting firms receive thousands of applications every year for entry level accountants/auditors. They get the pick of the crop so you have to have something that sets you apart from the pack.

An internship perhaps???

Pompano

June 19th, 2012
5:18 pm

“Personally, I’m very pleased that my heart surgeon attended college.”

However, your Heart Surgeon didn’t learn to be a doctor in college – they were trained for that in Medical School. Only a handful of jobs these days actually require a college education in order to obtain the proficiency to perform. The vast majority of the time, the College Degree is only used as a screening tool.

Dan

June 19th, 2012
5:25 pm

Things have changed very little in 30 years, well except for unrealistic expectations and a propensity to complain. I graduated from college in 86 with an Accounting/Finance degree and made more money waiting tables than in my first auditing job, sooo I continued to wait tables for a couple years to supplement that low income. Waiting tables through college also helped to defray that cost, and it still took me a good 7 years to pay off the loans. The point being Garland is not a victim and he has no sob story his situation is normal, it simply differs from the butterflies and unicorns he was promised by his educators

Dan

June 19th, 2012
5:35 pm

To be fair, I am not so sure his educators told him the fairy story either. Accounting and Finance professors tend to be a bit more realistic in such matters. But there does seem to be more of an inflated perception of percieved worth by recent grads

William Casey

June 19th, 2012
5:46 pm

@POMPANO: I could be wrong but, I don’t think that they allow anyone in med school without an undergraduate degree.

[...] is the original post: College: Expensive but worth the cost? | Get Schooled ← College Rankings Can Help Students Pay for College … Get Athletic Scholarship [...]

Solutions

June 19th, 2012
6:34 pm

Since college is worth it, the little dears should have no problem repaying their student loans, therefore no loan forgiveness should even be mentioned, let alone considered!

William Casey

June 19th, 2012
6:42 pm

Solutions, you finally said something I agree with. If people borrow money, they should repay it.

Solutions

June 19th, 2012
7:17 pm

The college degree is being cheapened daily, by reduced graduation standards, inflated grading, and a glut of graduates. Remember, the little dears only study an average of 15 hours per week vs 25 plus hours for previous generations. They are totally dependent on their electronic devices.

Solutions

June 19th, 2012
7:29 pm

You missed a good one in the nyt, here is a preview:

Audits for 3 Georgia Schools Tied to Turkish Movement
By STEPHANIE SAUL
A report found three charter schools in Fulton County, near Atlanta, had made purchases from businesses with connections to school officials or the Gulen movement.

Prof

June 19th, 2012
8:30 pm

@ Solutions. I guess you’re new to this blog. There have been 6 blog-threads on June 5 and 6 devoted to the subject of these “3 Georgia Schools Tied to Turkish Movement,” with spirited discussions between advocates for the schools and other bloggers. Check them out on “Older Posts.”

We know all about this.

Lee

June 19th, 2012
8:32 pm

@Pompano, re “Only a handful of jobs these days actually require a college education…”

Probably more than you think. To qualify for most professional certifications, you must have at least a Bachelor’s degree in field and often, you must have graduate hours or degrees.

For example, I am a CPA. Here are the requirements: http://sos.georgia.gov/plb/accountancy/licensure.htm

Now, to become PROFICIENT, hell, sometimes I wonder if there is such a thing….

Solutions

June 19th, 2012
8:48 pm

My bad, I don’t check in on a regular basis, it goes in spurts.

About to Feel the Pain

June 20th, 2012
2:52 pm

College tuition is rising but it is the attached fees and services that are required that literally “eat your lunch”. The mandatory meal plan for first year students at UGA is around $4K per year for full service. Want limited? You save around $280. Not much of a break.

Parents – complain to the regents of your state universities. AND, quit giving your child an open pocket for unreasonable schools. Not all high school grads need to go to college. I was LIVID to read my son’s yearbook that a classmate wrote in ink (no political career for him!) thanks for letting me cheat in Honors Anatomy! And this kid is headed to Berry! Nice. If only the parent knew……

Ole Guy

June 20th, 2012
4:26 pm

Mr Miller would not believe the types of jobs I held, following attainment of my first degree; at the age of 28. A veteran, former helicopter pilot, and, despite having to swallow a bit of SE Asian dirt, I held some of the lousiest go-nowhere jobs imaginable. Did I like it? NO FREQUIN WAY! That degree, I found out, represents a helluva lot more than academic preparation for the job market. It represents the notion/the antiquated virtue that YOU, the degree holder, knows all about DELAYED GRATIFICATION; that YOU, the degree holder, have the discipline to 1) stop feeling sorry for yourself, and 2) know that, despite the terrible economic conditions which have a stranglehold on this great Country, YOU will prevail. It won’t be easy…never was; never will be. It wasn’t easy for my parent’s generation, it wasn’t all that easy for my gen, and it certainly won’t be, now or anytime in the future. Just be the best gd lead server you can be.

Godspeed, Garland!

Truth in Moderation

June 20th, 2012
5:48 pm

A very insightful article on a related topic at Zerohedge:
http://www.zerohedge.com/news/guest-post-housing-recovery-based-what (scroll about halfway down)

“Since the interest rates on student loans can be higher than mortgage rates, $100,000 in student loans will cost as much as a mortgage. Everyone with a mortgage-sized student loan will be unable to qualify for a mortgage unless they vault into the top 15% income bracket. Everyone below that high-income tier will have too much debt to qualify and too little income to service hundreds of thousands of student-loan/mortgage debt.

It boils down to one or the other: get student loans and forget owning a home, or avoid student loans and eventually hope to qualify for a mortgage. Few will be able to do both.”

Prof

June 20th, 2012
7:29 pm

@ Truth in Moderation. This is a blog entry in a conservative business journal, FWE, or Forecasting World Events. Just because someone states it in print doesn’t mean’s it’s true.

LawDawg

July 16th, 2012
1:41 pm

“salaries and college grads are still faring better in the job market that those without degrees”

No s-word. The question is whether the expected additional income for the average graduate, or the increase in job prospects, outweighs the cost of the degree and the opportunity cost of those years in school.

I have a feeling that learning a trade (HVAC, auto mechanics, etc.) has much, much better expected lifetime earnings than someone who graduates from a non-flagship university or college or, worse, gets an associates degree.

LawDawg

July 16th, 2012
1:44 pm

“I understand that anyone making less than $50,000 pays 0 taxes”

You understand outrageously incorrect things, then.

LawDawg

July 16th, 2012
1:48 pm

The problem is not whether a college degree is “worth it”. The problem is creeping credentialism (Look it up). A college degree is now a shortcut for employers to look at a resume and say, “well, this person can (likely) read and write and has at least enough dedication to earn a degree.” Little of what you learn in college is going to help in many fields, but if you do not have a college degree, many employers are going to assume you are either 1) stupid, 2) lazy, 3) both.

Of course, some BS online degree or GA perimeter degree is not really going to help perceptions with those employers, anyway.

Tap Out

July 16th, 2012
2:23 pm

Considering they’re institutes of higher learning, colleges and universities have yet to learn that they have way too much overhead and infrastructure. Online classes with limited classwork such as labs and special projects are the sensible future. Although most have begun limited use of online technology, they are not fully committed because jobs will be lost. It’s much easier to charge the students and their parents more money. It’s a future that won’t come smoothly because there is a lot of money in having a useless sprawling energy eating campus.

yawnsaidalready

July 16th, 2012
2:25 pm

LoL!!!! Wow said this 2 years ago when papers were talking about student loans, 40k a year colleges and etc…FINALLY parents are coming to their senses about NEEDING the bragging rights of where their kids are going vs the truth that your debt ridden child is returning home after 4 years of being away. I am so PROUD of my daughter who listened to my advice vs the taunting of her friends who were “going away from their parents.” Now as she prepares to leave town for her first job DEBT free she is watching many of her friends return home, working at Chili’s unable to afford a apt and their student loan at the same time! Now I have the BRAGGING rights!!! Go enjoy your life!

UGA Parents

July 16th, 2012
2:37 pm

We just paid UGA for the Fall semester exactly $5939.50 after the deduction of the Hope Scholarship. Last year we spent $11000 for two semesters (living on campus in one of the cheapest dorms, 7 day meal plan, and tuition/fees) and another $300 for books and $150 for laundry. This sophomore year it will be $12000 plus books and laundry. So, I expect by the end of four years we’ll have spent $50,000 + for a bachelor’s degree in computer science and our student will have to pay the 5th year to get complete a double major in business which will probably mean $15K for him. Hopefully, by that time he’ll be working enough to share living expenses with several others in an apartment and cut down out/down those dorm fees. Is it worth it? I think so. Is it easy? NO but we know how to budget and are willing to sacrifice.

Techgg

July 16th, 2012
2:39 pm

Wow, very informative discussion here. Keep the healthy discussion coming.

Brandon

July 16th, 2012
3:19 pm

Is it even worth it going to college if you are not getting a degree in the Medical Field or Engineering? I ask myself this everyday.

Big Al

July 16th, 2012
3:29 pm

My sister graduated from Princeton University (Ivy League) and she was paying off student loan debt until she was 42. I graduated from Georgia State University (very far from Ivy League) and I had my student loan paid off by 26. She has had great jobs, but she has lost years of savings paying for college debt.

I think the lesson for all potential college students is to measure the benefits against the costs when investing in higher education.

Bacchus

July 16th, 2012
3:39 pm

Being educated is abolutely worth the expense, as American educational mores and standards have been eclipsed by our European counterparts as well as dilligent Asians with their balls-to-the-wall study habits. Want to enter medical or law school? Want that analyst position with McKinsey, E&Y, Accenture, or PWC? You’re up against a very international pool of competitive applicants with a higher standard of rigorous academic training than what our public school system could ever dream of reaching.

Most 18 year old high school graduates have no idea of what they want to do. Many graduate college and enter the workforce doing something outside of their course of study.

My suggestion and experience is to pay in-state tuition only, apply for scholarships, and pay for everything out of pocket (no loans unless needed for tuition – not living expenses). Pursue a business degree or something close to it. Study foreign languages (become fluent in one or more). You can specialize in grad school, but only after you’ve spent a year or so working and are sure you want to spend the extra $50-$100K on a Master’s or Doctoral degree in a specific field that has a good ROI (i.e. not sociology).