Economic Value of a University Education

I believe there is a great value to obtaining an university education. There may be a lack ofg benefit to a doctorate, but an undergrad and a masters certainly offers options not available to those without such education.

As for those that believe the value drops as more jobs go offshore and immigration continues "unchecked" I would like to add my opinions to the mix:

* As jobs go offshore, the demand for skilled labor increases. At some point, the demand starts to put wage pressure on employers overseas, and they start to lose their cost advantage. At that point, they need to compete on attributes other than low cost. Further, workers in the offshore country will, serving their self interest, look for additional monies (either ot increase their income or to increase their leisure time). This increases the costs associated with recruitment and training of talent to assure continuity of projects and other activities within the offshore firm. Such cost pressures will accelerate the loss of cost advantage, and increase the need to compete on other attributes.

* As for the argument of "unchecked" immigration, I would argue this has been an 'issue' for decades, if not a century. At most times within the US history, people complained immigrants were taking jobs away from Americans. However, we are a country built on immigration. Overall, I would say legal immigration is one of the this country's strengths.

There will always be those industries that cry 'wolf' when actions such as reducing H1B visa quotas occur, especially here in SillyCon Valley. For a part of the US that seems to embrace a culture of change and risk taking, manglement here really gets upset when someone moves their cheese.

 

Jack is right I was in error. First mistake was choosing Harvard as model (I too often gratuitously use Harvard as my whipping post). It might have been wiser to use the University of California Berkeley or other "public" Ivy.

I agree with Jack that there are people who will study a subject for the enjoyment of the subject. I do not debate this but I think (I have no real numbers on this) that they are the minority (when talking about Undergraduates).Yet from all public and social indicators point that this is clearly not the reason why most people attend (how often do you see the articles in newspapers and magazines that state: Nursing majors start of at X, Liberal Arts Majors make start at X, etc.) If as a society the majority of people were truly interested in the intrinsic value of a degree these very articles in popular magazines and newspapers would perish

 

Happily, I can agree with Tim that most of the people on this forum are seeking to advance their careers, make more money, etc. and that this is likely the case with anyone who is 25+ years of age and interested in continuing their education. Fortunately for us all, DL has provided a way for us to work toward such a goal. There is scarcely a field of endeavor that can not be pursued through DL, allowing a person with sufficient commitment to maintain their job and contribute to their family. It is because of this factor that Tim has identified that DL will continue to expand and grow.
Jack

 

Westmore College have a rather convincing writing up on the topic here. Do you think a graduate of Westmore wrote this ?

Cheers,

George

 

Value of a University Education

In the increasingly technological world we live in, I don't think your friend could be farther from the truth. Competition for good jobs is becoming more fierce every year. It's a tough market out there, but the more knowledge and skills you have, the more competitive you can be. It doesn't take a degree to understand this basic concept. To me, it's just common sense.

 

Interesting topic:

I believe your friend may be correct at least for a few years for those who don't work for four years while attending school right after secondary school. At least for many students who are pushed into going because it is expected of them. I wish more students were encouraged to take some time off before attending college.
I'm convinced that the huge student loans that many young people incur take away many of the benefits of their eduacation. Let's consider the 22 year old that has $100K in student loans to repay and has a degree in Architectural History or Museum Studies (I don't mean any disrespect to any here who may have these degrees, I'm just pointing out some degrees I am aware of that have very few openings each year at the BA level).
What I'm curious about is, what career your friend does encourage young people to engage in? Manufacturing used to be a profitable career, but the outsourcing of those jobs has curtailed the luster. In addition, many of the remaining manufacturing jobs are high tech and require considerable eduacation.
I agree with the argument that an eduacation can help develop the ability to communicate and think which are talents that any career would benefit from. I'm just not convinced that the economic benefits are there for many students.

 

Let's not. I have to protest that these examples are so extreme, the student has to be virtually trying to go bankrupt. This is the academic equivalent of trying out for professional sports as a full-time job, or spending $2 million on a 2 bedroom cottage on 1/10 acre in Kentucky. Kentucky is lovely, but nowhere in KY is a postage stamp lot and a cottage worth this much. Over-leveraging debt with no prospects says nothing about the value of higher education and a lot about the stupidity of the student who would do this.

 

http://www.martynemko.com/pub/articles/harvard.shtm is a writeup on why less expensive colleges are probably more worthwhile for most students even if they are accepted by the top schools.
John Bear (I have the 13th edition of Bear's Guide to Earning College Degrees Non-tradionally, but I don't have it in front of me at the moment) mentions an argument for not attending college in the tradional manner, based on the high cost of eduacation.
Many positions that used to require a college degree in the US have modified the requirements for the position to state "degree or equivalent experience required". I admit that to move up beyond those positions into middle management, the degree is normally a significant plus and to move into a C level role without an MBA or JD is very rare.

 

What jobs are left may still require a college degree, however. When I first entered law enforcement in the early 80's it was rare for a cop job to require college. Now, the opposite is true. At my current job, the primary job title used to require only a high school diploma, now it requires a degree. Simply put, the BA is almost what the HSD was 30 or 40 years ago.

Having said that, however, my opinion comes with some caveats. There have been several studies which indicates there are different levels of degrees. For most jobs, just having the degree (from any school) is what is necessary. Having a gold plated degree is excessive and a waste of money in those instances. At the other end there are employers who look strictly to hire at the elite schools so spending the big bucks for an Ivy league education is necessary in those instances. What this leaves out are the ridiculously priced private schools in between the bare bones state schools and the Ivy level schools. A friend of mine has a son who is attending a well regarded private school in our area that costs about as much as an Ivy League school. However, it isn't so well regarded that he can parlay his diploma into a job at one of those firms that hire from the elite schools. To make a long story short, he would have been better served going to a less expensive state school than saddling he and his parents with a debt load that could have bought a house around here. My daughter wanted to attend Beloit college. It cost well over $20K per annum for tuition alone. She opted for one of our cheapest state schools which also has a highly regarded program in her field. At graduation, I owed around $13k for 4 years of school (she lived on campus too) and she owed zero dollars. I know people who spend more than that for private high schools. Her diploma got her into one of the top schools in Canada on a full ride. The graduate program she is in is also very highly regarded in her field.

Going to a non-elite private school charging Ivy League prices is a waste of money if not time. Moreover, going to even an Ivy League school just so you can get a run of the mill job is a waste of money. I read of one girl who was attending Harvard to be a teacher. She was graduating with over $60K in debt to get a $24K per annum teaching job. Doesn't make sense. Moral is get the cheapest degree necessary to get the job you want.....

 

Re: Re: Economic Value of a University Education

I do not want to belabor the point but this is true ONLY if you place money as the highest priority in your value system. The young woman you cite will undoubtedly have an enormously different experience attending Harvard than she would if she attended some backwater state college. If you want to say that it doesn't make sense to you then that's fine. But please don't say it doesn't make sense. This is a subjective matter and it relates to the values of the individuals involved.
Jack

 

The enormous presumption here is that the sole purpose of earning a degree is to link to ONE job. The concept of future opportunities is a little lost here. What if after a year or two or three you no longer want that job the cheap degree got you? What will be better for a new job--a degree from Harvard, or a degree from Local State? I have known several people with Ivy League teaching degrees who segued into all kinds of corporate trainer positions based on the respect that expensive bachelor's in education earned. The first job might only pay $24K, but the second might pay many times that. The opportunities of the more respected degree program have a potential future pay-off much higher than the cheap degree.

Even if the student chooses a lower-paying field, money isn't everything. Some education is actually worth more, even if you have to pay more to get it. This super-generic approach to education is disheartening to say the least. By this logic I pay more attention to the brands of my toiletries than some people do to what schools they attend for years of their lives. The Harvard experience for $15K a year is not a bad deal at all, and I can't imagine too many people passing this up. I would even be willing to switch to generic toiletries and give my savings to Harvard!

 

Re: Re: Re: Economic Value of a University Education

Your kind of missing the point. Your point would have validity if it wasn't money you had already paid for your education. To go to school and get a job you like for lesser pay makes sense until you have to pay excorbirant student loan payments. However, if you owe the price of a home in student loans, work at that job you love but can't pay your student loan payments, try telling the bill collector that money isn't high on your value system priorities. Don't work, they will laugh at you and take your money to pay off the debt. We live in the real world not Utopia....

 

And the bad news is.....

Your college gets you your first job. You get your second job from your first etcetera.

You need to reread my post again. I clearly stated that paying Harvard prices for a non-hHarvard degree is what is foolish. Unless of course if you want to be a school teacher in my home town. Then paying Harvard prices at all is ridiculous because you can get a job there with a degree from Southern Illinois University.

Disagree with me all you want but there are ample studies that show the high cost of some private schools does not pay off in the end, period. One of the latest is from a group out of Stanford. The point is there are tons of academic studies that dissaprove your opinion about undergraduate education. Note, this applies to undergraduate education, it is a whole new ball game at the graduate level. There name comes way more into play....

 

Re: Re: Re: Re: Economic Value of a University Education

The funny thing is that I am about to say the same thing to you.
Your mistake is that you believe that the only thing you get from the money you spend on your degree is a job. If you can teach high school English with a degree from Podunk U. then why pay for Colby College (or William and Mary, or Goddard, or Middlebury)? You're going to get the same job so why pay the higher price? I get it.

What you don't seem to get is that there is another way of thinking about it. If I send my daughter to Salve Regina I know that she'll be in a quiet, serious, controlled learning environment. Four years in that environment is qualitatively different than at Podunk U. If I send my daughter to Colby, part of what I'm getting for my money is a small liberal arts environment. I'm also buying the state of Maine. If she goes to Grinnell I'm buying Iowa. If she goes to Reed I'm buying Oregon. The educational experience is substantially different at these schools than at Podunk U.

So, my point is that what you are buying when you pay your tuition bill is not just for that endproductjob after four years. You are buying the total experience. The endproductjob is nice and it is important, but it is not the only thing you buy when you pay the bill. If other people value this enough to pay for it then I don't see why you care so much.

There are two other points. The first is that the vast majority of the kids who go throught these high-end liberal arts schools are NOT going into debt in the process. Their parents may be incurring some debt but not the kids. Of course, the parent probably make enough money so that they've been planning for this for years and it's not a big problem.

The second is related to an old issue in this neighborhood, that is, the hierarchy of RA schools. There is much discussion of "First Tier, Second Tier, etc" There is general agreement that there is some stratification within the RA ranks. Harvard is a better school than Podunk U. The standards are higher, the workload is bigger and the competition (if you're into such things) is much, much stiffer. If a kid goes through Harvard and gets good grades they have proven themselves to be among the best students in the country. If a kid goes through Podunk U and gets good grades everybody appaudes at graduation, with good cause. But take both kids and put them into the same MEd program and then try to convince me that 99% of the time the Harvard kid comes out on top. So now our two teachers both have there Masters and they want to become school administrators. All things being equal (a silly thing to say, really) who do you think gets the job. If they apply to the same PhD or EdD program, who gets in and who doesn't? This is also what you're paying for when you pay that high-end liberal arts tuition.

You can agree or not, that's OK with me. Send your kid to Podunk and tell them all about how much money you're saving. You can agree or disagree but please be aware that there are thousands and thousands of families that send their kids to these liberal arts collegesevery year. Do you really think that all those smart people are wrong and you're right?
Jack

 

Re: And the bad news is.....

Could you please post one of these studies? I'm not sure a study could "disprove" my opinion, which is simply that some people are so in love with a certain program or a certain school that it is worth it to them to pay the necessary tuition. They are not seeking "name" but rather a certain education and experience--the "name" might not even be noticed by them. I would rather attend my first choice school rather than my second, even if it costs more.

P.S. I did read your post again; you have 4 typo's.

 

Wrong, I get your point exactly. Know all about chasing dreams and that rot that our older siblings learned back in the 60's. However, despite your assertions to the contrary the fact is more and more students are graduating with debt and it isn't just a little debt but is at record levels. It may also be that their parents are footing more of the the bill but those parents are the same parents who have record low retirement savings levels despite the fact they will live longer in retirement than their parents. Look up the current advice for parents planning to foot their college age kids tuition bills. First word of advice out of every experts mouth is "Don't stop saving for retirement to send your kid to college".

Going to school because that is where you want to go is fine if you can afford it but we all have to live in the real world and not utopia. The real world says we have to pay our bills. The Utopia attitude is why we have record debt loads overall in this country today. I actually had a young woman tell me the other day that she wasn't going to go without if she had room on a credit card. I was amazed but I shouldn't have been because that is exactly the attitude people use for college.

The Atlantic Monthly has annual articles on this subject. It was the one who published the Stanford study that said the expensive private schools were a flat out waste of money. It also published an article from Brown graduate wh had always dreamed of his son following him to Brown. Problem was when that time come he couldn't afford to send him there and didn't want to have his son saddled with debt. He published a pretty good expose on just how out of proportion costs at Brown were today when compared to the natural rate of inflation. He pointed out that when costs such as increased salaries and infrastructure imporvements were factored in it still didn't explain the steep rise in tution. He surmised that since Browns endowment was skyrocketing they were socking the money away and charging so much simply because they could. People will still apply because in our ratings made environment people think they have to go there to get a job. They'll pay 5 times as much to go to a private school in the 2nd tier than a state school in the third tier and will derive no economic benefit from it.

Quiet serious learning environments? How about MIT, home of the nerdiest students on the planet? They are so studious that they have extremely high alcohol abuse rates. Those nerds are partying and so much that several of them are dying of alcohol overdose.

Substantially different is not substantially better. In fact, the average Podunk U probably has more to offer students than the average small liberal arts college. My daughter went to a Podunk University and was in their honors program. She had opportunities there that a smaller school simply could not have afforded. She spent her last year in a FUNDED undergraduate research program that allowed her to do independent research normally available only at a graduate level and they gave her $1000 to do it!! She had looked at Beloit College because she initially wanted that small town/small school environment and Beloit was one of the few small liberal arts colleges that offered a TRUE anthropology program. However, that $25k annual tuition was flat out ridiculous. Neither do I remember anything like the ubdergrad research academy all they had was the senior seminar available at almost any school. People are so shallow about college selection these days that when I visited eastern Illinois University with my younger daughter I arrived to find 3 times the visitors then the school expected. Turns out that only the week before the USN&WR had moved EIU into the upper tier for regional schools. I guess it was such a better school now?!

Jack, at the risk of offending you, it is people like you who have allowed schools to get to where they are charging ridiculous amounts of money for no better educations than offered at a local state school. They do it because they can and people will still go there. Their kids will graduate with debts they can't afford and their parents will go into their retirment years still paying off their kids student loans. Don't say it doesn't happen, I've seen it and the statistics show it.....

 

Re: Re: And the bad news is.....

Oh goody, you can spell. Spare me.

back to reality people, the OP's question was is it worth it for him to go to back to school. I answere yes, but it may not make financial sense in all instances. All of these environment and dream opinions are NOT what the OP asked for. I may have 4 typo's but I can read what the original question. And anyone who doesn't think "name" has anything to do with college selection these days hasn't seen the explosive growth in college rankings. It is the new growth industry in education.

But for your enlightenment, here is an MSN article on one of the studies done by no less than Paul Krueger of Princeton (somewhat of an economics prodigy at a pretty good school) and Stacy Dale of the Mellon Foundation, you know one of the most prestigious foundations in higher education. Just some clips from the article:

The following is why in some instances someone would pay for an Ivy League education, which I agree with by the way:

"Hoxby understands this, which is why she compared students paying average 1997-98 tuition at a third-rank public college to those paying average tuition at a first-rank private college. Even adjusting for differences in student aptitude, the private school student would be expected to earn back the difference in costs more than 30 times over during the course of a working lifetime, far outstripping any possible investment returns on invested capital"

On the other hand they address the non-elite private schools and the very good, even elite public schools:

"Take all this data with a grain of salt and apply common sense.

If your kid intends to become a social worker or minister, an Ivy League education will never pay off in financial terms. And if your child wants to study studio art but is admitted to Cal Tech, there’s no point paying for Cal Tech. Spend the money on a school with a better art program.

If you live in a state with a premiere public institution -- a school such as UC Berkeley, University of Virginia or University of Wisconsin -- it’s hard to justify going elsewhere, unless elsewhere is one of the very best private schools. Even then, in the view of Dan Black, you should pick your state school.

Under no circumstances should you pay for a mediocre private school. These make no sense at all."

http://moneycentral.msn.com/content/CollegeandFamily/Savingforcollege/P36742.asp

Just so you know, a mediocre private school can still be rated a top tier regional. Have a nice day.......

 

I hope your kids are happy at Podunk.
Jack

 

Re: Re: Re: Re: Re: Economic Value of a University Education

The answer to this is yes, but it isn't just me it is others who actually study these things for a living.

http://moneycentral.msn.com/content/CollegeandFamily/Savingforcollege/P36742.asp