Re-Thinking the Pathway to Higher Education

We have finished another school year with over 3 million high school graduates. Congratulations! Seventy percent will go on to a four-year college, even though according to the Bureau of Labor Statistics (BLS), only 27% of the jobs created through 2022 will require a four-year degree and 70% of all new Wisconsin jobs being created will only require a high school degree, according to the UWM Skills Gap Report. Based on the BLS data, National Public Radio (NPR) makes the “tongue in cheek” analogy that you could close every two and four-year College for 10 years and still meet the industry demand for college graduates.

Nineteen percent of these new high school graduates will finish their four-year degree in four years. Congratulations! Thirty-nine percent more will complete that four-year degree in six years. For the rest, life just goes on. Of those who do graduate, only about 30% will find jobs in their field do to a job market saturated with previous college graduates. Are we over-educated? Are we just choosing degrees that do not equate to a job after graduation? Or, do we just not understand our options?

College graduates will have an average student loan debt of $30-50,000 depending on which completion plan they were on, with many having student loan balances in the hundreds of thousands of dollars. Total student loan debt is $1.3 trillion today and rising $3.300 every second. Congratulations! Did you know that higher education was a one-half trillion dollar industry? Paying back your federal student loan starts six months after graduation and has two options: 1) monthly payments over 10-25 years or 2) death.

There were over two million college graduates this year. Congratulations! Twenty one percent had jobs when they graduated with an average salary of $40,000, or about $20 per hour. Congratulations?  That is until the minimum wage moves to $15.00 per hour, then the whole return on investment college argument becomes suspect. Thirty nine percent took jobs that did not require a college degree even though they just spent four to six years of their lives and $30-50,000 getting one. Can you spell barista? For the other 40%, life just goes on.

Today, in the United States, there are more 18-34 year olds living at home than at any time since 1880. Congratulations! This makes perfect sense. A college graduate earns $40,000, Uncle Sam takes 25%, and the average monthly expenses for a 20-something living alone is about $2,600. Ouch, we are in negative territory. Let us look at all millennials. The average salary is $27,000, Uncle Sam takes 15%, and the expenses are still about $2,600. Even more negative! Pretty tough to stay out of the red being a single college graduate or millennial. Note to parents: make sure you save a room at the inn.

The PayScale Website points out that many careers we assume require a four-year college degree can actually be started with a two-year degree. The break-even earnings point for students pursuing this career pathway is about 10 years. You say sure, but after 10 years the four-year college grad will earn more, right? Nope. I forgot to mention that after two years on the job the two-year graduate went back to college using tuition reimbursement from the employer and earned a four-year degree. With the gained experience, four-year degree, and no student loan debt, the two-year career pathway choice was the best value with greater lifetime earnings.