BY RICHARD VEDDER for the Cleveland Plain Dealer
A degree from a four-year college is something that many people would profit from, but far from all. My guess is that perhaps one-third of graduating high school seniors should enter college.
The remaining majority should go to community colleges, career colleges or trade schools — or, in some instances, directly enter the work force.
Those arguing college is worth it point to the large earnings differentials of college graduates compared with those with just high school diplomas. Those differentials exist, but they are subject to at least five types of criticisms.
First, comparing high school and college graduates is like comparing apples to oranges. On average, college graduates are smarter and more disciplined (as evidenced by higher high school grades and test scores). In a world without colleges, those otherwise college-bound students would do better than the others anyhow, because employers want smart, disciplined, loyal workers.
Second, there are enormous uncertainties and risks associated with going to college. Federal data suggest over 40 percent of college entrants fail to graduate within six years. For the considerable number of students who drop out of school after two to three years with large college debts, the college “investment” is often a poor one, and those students are frequently stigmatized by employers and friends as being failures.
Third, many college graduates these days are getting jobs that historically have been taken by those with high school diplomas, and for which a college degree at best marginally increases one’s income. There are over 80,000 bartenders and nearly 19,000 parking lot attendants in America with bachelor’s degrees or more, and among the over 300,000 restaurant servers with degrees, there are over 8,000 with master’s, doctorate or professional degrees (for example, a law degree). We do not live on Lake Wobegon–not everyone is above average; indeed about half make less than the average.
By one way of calculation, one in three American college graduates today are in jobs that the Labor Department says require less than college-level skills. As college enrollments have soared, the number of graduates easily exceeds the increase in employment in the managerial, professional and technical jobs that are historically the home of most college graduates. While the current sluggish economy has aggravated that tendency, it was building even before the downturn starting in late 2007.
Fourth, not all colleges are created equal. Perhaps 50 years ago just being “a college graduate” was quite a distinction, and not all that much fuss was placed on the college attended, with a few exceptions like Harvard. Not today. According to PayScale.com, median earnings of people who graduated 10 to 19 years ago from Harvard, Northwestern, Stanford, Case Western Reserve universities or Kenyon College, exceeds $90,000 a year, compared with less than $60,000 at Kent State and barely $70,000 at Cleveland State. Their sample size is pretty large, but not all-inclusive. Nonetheless, the data are probably fairly accurate, and show that graduating from Harvard is far more remunerative than graduating from, say, Kent.
My associate Ryan Brady has estimated that the present value of lifetime earnings of graduates of 44 top colleges (as ranked by either U.S. News & World Report or Forbes) averages 42 percent more than graduates at 44 colleges ranked at the bottom of the Forbes list, a group that includes several of Ohio’s state schools (for example, CSU, Youngstown State and the University of Akron).
Also, the financial advantages of going to college need to be weighed against the costs, and those costs have been rising sharply,
Fifth, even within schools, earnings vary enormously by major. Persons with degrees in, say, social work, anthropology or elementary education will on average earn far less than graduates in electrical engineering or accounting. To be sure, there is more to going to college than getting a high-paying job, but the financial burden of getting the degree is increasingly great.
Who should go to a four-year college out of high school? Students whose high school experience indicates they have a good chance to succeed in college–kids in the top two-fifths of their high school class (perhaps top one-quarter at high schools with poor academic reputations) who took college preparatory courses and had decent ACT or SAT scores, for example.
Students who do not meet those criteria should seriously consider a two-year community college or a for-profit institution and, if they succeed, then transfer to a four-year school. The ease of transfer into four-year institutions has improved somewhat in recent years, and one of the very best students I ever had (among more than 10,000) was a fairly recent transfer into Ohio University from Cuyahoga Community College.
It is wrong for admissions counselors, U.S. presidents and leading foundations to tell students “you must go to college,” an overly simplistic message that creates heartaches for many.
Four years of college works for some, but by no means all.
Richard Vedder is distinguished professor of economics emeritus at Ohio University and directs the Center for College Affordability and Productivity in Washington, D.C.