Is the Investment in College Education Worth?
In the recent years, students have been incurring more costs to attend colleges, and earning less upon their graduation. It is from this trend that many observers tend to question the worthiness of college education. The return has remained high despite rising tuition and falling household incomes since the earnings of people without a college degree have been falling, keeping the college wage premium nearly high all the times, and concurrently reducing the opportunity cost of attending college. Several economists have cost-benefit analysis and they have concluded that the benefits are much more than the costs.
The basis of the current notion that the investment is not worth is the premise that students are paying more for their degree courses, and earn less upon their graduation. In my opinion, students base their arguments on underemployment that exists in most economies of the world, which is temporary. Research indicates that the prospect of underemployment deteriorates significantly as one ages, and college graduates often get professional jobs as they approach their thirties. The proceeds averaged at 9 percent during 1970s and sharply improved until 2001 when it almost doubled to approximately 16 percent. The rate of returns has been at 14 or 15 percent for the last decade. In 1970s, the rate of returns of associate degrees was at 6 percent, more than 16 percent in 1990s, and later, the rate has been ranging between 13 and 15 percent. The implication is that investing in an average student’s education is a good venture. How about students whose performance is below average? Returns also include non-monetary benefits, such as fringe benefits, positive health outcomes, and civic participation. For instance, most people with college degrees tend to practice healthy living, such as embracing physical activity, and are more likely to vote in elections. Other benefits including health insurance policies also accrue to degree holders, whether in employment or underemployment. The argument that we should stop seeking college education based on the current economic trends is naïve, ill-advised, and unreasonable. Therefore, if we understand the dynamic nature of economic dimensions, all American students must realize that a college degree has potential for attractive returns and therefore, there is no option but to fight hard to achieve it under the seemingly doubtful returns.
The success of a graduate is not only a measure of how much he/she earns from the employment but rather the extent to which one can use intellectual capacity and creativity gained from college experience to deliver to the society. In addition, earnings entirely vary according to areas of specialization, and therefore a graduate should never expect more returns from a degree in a field that is not demanding. If a graduate wants to earn more, then he/she should think of pursuing mathematics or science. On the contrary, the students think that the other nonfinancial benefits are also available for the diploma holders. The reality is that despite their existence, one cannot equalize their magnitudes as they are from different grounds. For instance, the size of fringe benefits corresponds to the amount of direct returns in terms of gross income from employment. College education is both a public and private investment, hence the need for both parties to find a common ground to rest the case.