Education Pays in 2010, reports College Board, echoing reports in 2004 and 2007. The premium for a college degree has increased with higher wages and lower risk of unemployment. In addition, college graduates are healthier and more active in civic affairs.
But the recession has created skepticism about a college degree’s value, reports Inside Higher Ed.
The report exaggerates graduates’ earnings and understates costs, argued Charles Miller, former chairman of the Bush administration’s Commission on the Future of Higher Education, in an e-mail. “It’s not just a question of what the student pays, it’s what the total cost of a degree is, and whether that cost of education pays.”
Furthermore, Miller said, the benefits individuals derive from a degree result not from the degree itself, but from the economic and regulatory policies that create jobs and income opportunities, which college graduates absorb. And with financial aid going to students who don’t need it, “the finance system of higher education favors those who have special privileges and therefore maintains an unfair compensation for those able to get a degree.”
According to the report, “the earnings of college graduates increased more rapidly from 2005 to 2008 than the earnings of high school graduates did.”
In 2008, the (salary) averages were $33,800 for high school graduates; $39,700 for people with some college but no degree; $42,000 for people with an associate degree; $55,700 for bachelor’s degree holders; $67,300 for master’s degree holders; $91,900 for doctoral degree holders; and $100,000 for those with a professional degree.
College graduates are expanding their lead in job security, reports the Wall Street Journal, which looked at the class of ’95 at West Side High in Gary, Indiana. Phyllis Sellars, who earned a degree in sociology, is a white-collar supervisor with rising pay. Her old friend Tremell Sinclair, who went straight to work after graduation, was laid off from his forklift driving job last year; he starts a new job next month at a 46% lower salary.
The college advantage in pay leveled off in recent years, the Journal reports. But the employment advantaged has increased during the recession.
The unemployment rate for workers 25-and-older with a bachelor’s degree or higher was 4.6% in August, for example, compared with 10.3% for those with just a high-school diploma. That’s a 5.7-percentage-point gap, compared with a gap of only 2.6 percentage points in December 2007 when the recession began.
Laid-off college graduates are also finding work faster. Their median duration of unemployment was 18.4 weeks as of August, compared with 27.5 weeks for high-school grads. Three years ago, that figure was roughly the same for both groups — 9.5 weeks and 9.6, respectively. And among the worst-off 25-and-older workers, the 5.2 million who have been out of work six months or more, only 19% are those who graduated from college, even though that group makes up a third of the work force.
Still, some college-educated workers are struggling to pay off their student loans. Brandon Fleming, another West Side graduates, earns less than $40,000 a year as an insurance company analyst, about as much as he borrowed to pay for a Kentucky State bachelor’s degree and an MBA.
“I wouldn’t tell someone not to go to college,” he said as he ate his reunion lunch behind his old high school. “But they have to go in with the proper expectations, and I didn’t understand that.”
One of the highest earners in the class, Rick “Big Rick” Castillo, left technical college after a year to work at a steel mill. He makes $58,000 a year.
