Americans have a love/hate relationship with higher education. We love to have our children attend prestigious colleges and universities, brag to our friends about where they were accepted, and root for our alma maters during the playoffs—yet we hate the price tag and student debt that result from the pursuit of college degrees. Where our children go to college is a long-established status symbol in our country, just like owning a BMW or a large house in the suburbs.
We can all live fulfilled lives without the BMW or a suburban homestead, but unfortunately, our youth cannot live fulfilling, self-sustaining lives without a post-secondary credential. Previously, according to Georgetown University’s Center for Education and the Workforce, two out of three entry-level jobs required only a high school diploma. Today, two out of three jobs demand at least some education or training beyond high school. This change in economic reality—paired with the status-symbol view of higher education—has created serious repercussions for our youth. It may be time for Americans to consider a new paradigm when it comes to the value and impact of higher education.
A Serious Crisis
The economic requirement of college degrees has resulted in a student loan crisis. In February 2019, Forbes reported that more than 44 million borrowers collectively owe $1.5 trillion in student loan debt. Student loan debt is now second only to mortgage debt in the consumer debt category—higher than both credit cards and auto loans. Borrowers in the Class of 2017, on average, owe $28,650, according to the Institute for College Access and Success.
These statistics demonstrate just how serious the student loan debt crisis has become, impacting all demographics and age groups. This level of debt for our youth impacts where they work and live. Many education majors cannot accept teaching jobs locally because the debt they carry makes some of our district salaries financially unfeasible, leaving them to seek out higher-paying jobs elsewhere. The opportunity cost of this level of debt also needs to be considered. That $28,650 could have been a down payment on a house or graduate degree.
The Brand Impact
Yet, surely the Ivy League degree is worth the level of investment it requires, with or without student loans. Well, you should not be so sure. Researchers Stacy Dale and Alan Krueger say the answer is no. They conducted two studies, one in the 1990s and a follow-up in 2011, which gave the same results. There is no difference between the earnings of those who graduated from an Ivy League institution versus those who were admitted but did not attend.
Their study concluded that being a top student at a school is better than attending a top school. The research strongly indicates that the attributes and abilities of the individual student matter most—not the elite brand of the college attended. In an environment where the investment made in higher education has become life-changing, this is critical information for our youth.
So, it may be time for a new paradigm in American higher education. The popular financial advisor and radio personality, David Ramsey, is famous for stating that, “Debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice.” Maybe a new way to think about higher education is, “Debt is dumb, student performance is king, and the untaken student loan is the new status symbol for our youth.” PM