College as we know it is in a state of crisis. For years, political pundits and news periodicals have attempted to analyze the true costs and benefits of a post-secondary level education. As St. Olaf’s comprehensive fee ratchets up by 2.69 percent to $49,960 for the 2013-2014 academic year, many St. Olaf students will be left wondering about their own future financial security. The higher education “bubble,” as it is popularly called, is a phenomenon where the costs of sending a student to college rise exponentially faster than the quality of education being given.
Students must approach a college education as a long-term investment, especially at expensive private liberal arts institutions such as St. Olaf, where so much of student tuition furthers the quality of living rather than the quality of education itself. American universities such as the Massachussetts Institute of Technology and Princeton University have always been among the top-ranked universities in the world, but it is difficult for St. Olaf, which was ranked fifty-fifth in U.S. News and World Report‘s national liberal arts college rankings, to gain much reassurance of its international competitiveness.
As costs rise, it will become prudent for more students, especially those on the bottom of the academic heap, to pursue technical and specialized degrees, which education columnists from magazines such as Forbes and The New Republic suggest are typically a better value per dollar spent than many four-year institutions.
Peter Thiel, billionaire cofounder of PayPal, also believes the quality of education is diminishing with each dollar spent. “We are now doing the same or less with more and more resources,” Thiel stated last month. “What it has gone to pay for is about a trillion dollars worth of lies about how great the education was that people got.” Thiel is the founder of the Thiel Foundation, also known as the “20 Under 20” program, that grants a 100-thousand dollar scholarship to students willing to bypass college to pursue two years of innovative research. His program hinges on the idea that college and the resulting debt forces young adults to take jobs that pay higher salary, but stifle their creative genius, denying the world of the next generation of great innovators.
In an article written for The New York Times entitled “‘A Dangerous ‘New Normal’ in College Debt,” Charles M. Blow argues that higher education is becoming less feasible as college tuitions rise amid stagnant and high post-graduate unemployment rates. He also states that the quality of education recent college graduates are receiving isn’t any better than that of the 55 to 64 year olds leaving the job market. This article and others like it are especially pertinent to current St. Olaf students who pay about $20,000 more – $27,793 was the average amount paid by the first year class after financial aid – than the $7,692 average for four-year public universities, according to averages given by St. Olaf and CNN Money.
Additionally, The Atlantic magazine ran an article stating that 53 percent of recent college graduates are unemployed or underemployed, meaning they are working jobs that do not require a four-year degree. This statistic is reaffirmed by the United States Bureau of Labor Statistics, which puts the figure at 48 percent, still abnormally high.
Although prospects for recent college graduates seem dismal, there are many redemptive aspects of having a Bachelor of Arts B.A. degree. For instance, the unemployment rate for college graduates with a B.A. or higher is currently 3.9 percent. The unemployment rate for those with a high school diploma is 8.8 percent, and 12.7 percent for those with less than a high school diploma. For comparison, the total unemployment rate, according to the Bureau of Labor Statistics, was 7.7 percent in February 2013. By holding a B.A., one is two times likelier to find a job than someone with only a high school diploma, and three times likelier than someone without a high school diploma.
College graduates are also likely to have a higher income than people with a high school diploma or less. According to the Bureau of Labor Statistics, the median weekly earnings for those with a B.A. are a little less than two times greater than those with a high school diploma. By multiplying this difference over a decade, someone with a B.A. will have made, at a median value, $215,280 more than someone without one. That’s almost $1 million over 40 years.
It is clear that four-year institutions are in a degrading state, punishing students with long-term debt and diminishing returns on their education. Prospective students must approach a post-secondary-level education like an investment. Ultimately, there is a direct correlation between the major one chooses and the GPA they earn and the speed with which they are able to pay off their student loan debt. However, the higher education “bubble” may expand to the point where pursuing a B.A. degree, even from an institution such as St. Olaf, will not be worth the soon-to-be $50,000 per year. Students, and the benefactors paying for their education, need to ensure that the quality of education rises alongside the costs. As much as St. Olaf students would like to believe that their college is as competitive as internationally-renowned institutions such as Harvard, they need to decide realistically whether they would be willing to pay a Harvard tuition.