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.