Friday, May 31, 2013

Why College Is Overrated, and How to Benefit From It Without Crushing Debt

American student loan debt reached a trillion dollars last year.  Amazingly enough, that’s more than we owe on credit cards.  At the same time, college attendance is as high as ever.  One reason for that is the connection between having a degree and having a job.  David Leonhardt wrote in The New York Times this morning that the unemployment rate for those with bachelor’s degrees was under 4%, which is just over half the rate for everyone. 

Is that true?  Yes, with two disclaimers.  First, recent college grads do not have such low unemployment – two years ago the jobless rate for graduates under 25 was 9.5%.  Just because many are now in the room doesn’t mean people can still get in.

Second, correlation is not the same as causation.  That is a fancy way of saying that when two things seem to go together, one need not be making the other happen.  While that rule has been well known in the scientific community as long as there has been academic research – one mid-century sociologist, for example, tracked the extremely strong decades-long relationship between International Machinists Union membership and the population of the Indian state of Hyderabad – it still fools many otherwise smart people outside it. 

The truth is easy to understand.  When it is determined that two things are related, past the point of reasonable explanation by chance, there are three possibilities.  One, the first may cause or help cause the second.  Two, the second may do the same for the first.  Three, another factor may be responsible for both of them, making it look like the two things talked about are connected when in fact they have no relationship at all.  This third explanation is by far the most common.

Even researchers can be misled.  Years ago, studies uncovered that girls playing high school sports had lower rates of pregnancy and illegal drug use than did their classmates.  Even some Ph.D.’s assumed that the sports caused the low incidences of these other problems, and money was actually spent as a result.  Yet while the second possibility also had some merit – it could well be that girls with no inclination for drugs or unprotected sex knew they would be in relatively good condition for sports, so chose them – the third provided the answer.  Players of high school sports, except football and boys’ basketball, tend to be of a higher social class than their classmates.  The more blue-collar students are more likely to find part-time jobs, do other things, and drop out of high school extracurriculars altogether.  Social class also correlates inversely with drug use and pregnancy.  Therefore, the sports and the lack of these problems had a common origin, and there turned out to be no additional evidence that either caused the other. 

Accordingly, that college graduates tend to earn more and be employed more often is not enough of a reason by itself to judge that their degrees are the cause.  Those who put together 120 credits with the right distribution to qualify for a major have other abilities and qualities as well – intelligence, perseverance, strength to overcome various problems, and the disposition to complete long-term tasks, to name a few.  That is why a few people, such as Bill Gates and Steve Jobs, can leave their studies and achieve tremendous success in areas where most have degrees.  Those with larger family incomes, which usually go with the high social capital almost necessary for entry to and success in many well-paying fields, are much more likely to attend college in the first place.  Cultural factors, especially how much hard work is valued, connect with both school attendance and good jobs as well. 

So is it wrong to go to college?  Absolutely not.  There are, however, four things I advise today’s prospective students to do if they want to avoid a loan debt problem.  First, they should plan on working, if they have the opportunity, before and during school semesters, and committing some of that money to college expenses.  Second, they should only become full-time students if they will dedicate themselves to getting a 4-year degree – not just an associates’, as entry standards in many fields are rising.  Those who complete bachelor’s degrees do, indeed, have better chances of being hired than those who do not.  Third, for lower expenses they need to consider community college for the first two years.  Here in New York State, tuition and fees for local residents at Sullivan County Community College for two full-time semesters is less than $5,000, which compares with $8,500 at some public four-year schools and much more at private institutions.  Fourth, they should consider massive open online courses, or MOOCs, for some credits.  With those things in mind, a university education can be a great asset, well beyond helping job prospects, without being the financial disaster it becomes for all too many. 


  1. I have long advocated that in selecting a college the first criterion should be "Is this an Ivy league school?" Is it Chicago, Stanford, Cal tech, MIT etc.? If yes than it is probably a go.

    If not then shop for the cheapest education - but at a four year school. I am not impressed by community colleges; having attended one and taught at one.

  2. The value of community colleges is cutting costs for the first two years, and often getting into a better four-year university than possible directly after high school. With that said, I agree that the top schools, which offer degrees allowing graduates to emulate being in the 1%, may be, in the long run, the best values of all.

    Thank you for your post!

  3. Another reason for those deceptively high employment rates that you mention is that they have come at the expense of older workers and non-degree youth whose unemployment rates have soared . The" chronic" unemployment in these groups is not represented in unemployment statistics generally, as they are no longer collecting benefits or worse still, have never been employed. END HIRELESSNESS! The corporate business model of hiring only part timers to fill only peak hours has contributed to this mess. Similar to "just in time" inventory planning it reduces costs for corporations and artificially increases measures of productivity. It in no way benefits the worker or improves the work environment or gives workers "control" over their schedules to increase worker satisfaction, as business claims. Uncertainty breeds fear and submissiveness in employees.Everyone knows a revolving door goes out just as easily as in.

  4. True - it is just too cost-effective, in many settings, to hire workers for less than full-time. That is a consequence of health care being tied to work, among other things. And yes, for someone to count as unemployed they must be applying for jobs at least once a month, and not working at all - one hour a week counts as employed. The issues you mention are all challenges we face.

    Thanks for your post!

  5. I've read that MOOCs aren't widely accepted. I'm currently studying psychology through, but I'm not sure that, even with the transcript they provide, I'll get any college credit anywhere.
    Unfortunately, there are so many jobs for which I would have been qualified 10 years ago that now are not hiring people without a college degree. In the over 10 years I've been in my field, I'm not realizing that I'm not allowed to advance even though I already do as much or more, at least as well as, if not better, than others with less experience, but a degree who are seeking the same positions.

  6. That's over half of the value of a bachelor's degree these days, as a credential, regardless of how much you know. I was in information technology through the 1990s, and during that decade alone my B.A. went from big stuff (many people, even way up in management, didn't have them) to not enough (some groups had started requiring master's degrees for even small promotions). In IT then, as ever, experience, not education, dictated how well you could quickly contribute, so the academic requirements were artificial, put in to help employers cut down the fields for and make easier hiring decisions. I think in lots of areas, degrees are even more important for getting ahead than for getting in.

    Thank you for your post!

  7. I would suggest the prospective college student carefully consider the degree that they are going for, because not all degrees are equal on the "Job Market."

    If the prospective college student is considering pursuing a career that is related to their degree then they should research the availability of jobs/positions, as well as the potential income ranges among the jobs so as to get an idea of where the job market is going. In addition, they might want to begin making contacts with people in their future career.

    However, if the student is just taking the degree because they don't really know what they want (ie: Their parents wanted them to go to college), or to "Better Themselves" somehow, or as part of a "Social" program that has little -- if any -- career potential, then the student is going to have to settle for taking a job wherever and whenever they possibly can find one...likely flipping burgers or working at the local "Wally World."

    What I am saying here is that the student has to plan for success prior to going into college. Plan for success early, and when something comes up that interferes with that plan (and it will), modify the plan and move forward.


    ~ Fred

    1. Yes - see for a look at which jobs and careers have good prospects through the next 16 years. Thank you for your post!