Yahoo Finance Most Americans think college degrees aren’t worth the expense, according to a new study
Steve Jobs, Mark Zuckerberg and Bill Gates may be touted as extreme examples of how far you can get without a college degree, but these guys are seen as exceptions — not the rule.
But now, this “rule” is starting to fall apart. According to a Pew Research Center study, only 22% of Americans think a college degree is worth the cost of tuition and student loans these days.
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Nearly half of the respondents (47%) said that a degree is only worth it if you don’t have to take out loans. With the Federal Reserve stating that 30% of Americans who attended college carry student loan debt, this doesn’t inspire much confidence in higher education.
After all, a diploma may not land you a well-paid, 30-year career anymore. But here’s what it can — and can’t — get you instead.
You can earn more — and less
The Pew study pointed out that high school graduates earned less than those with a bachelor’s degree, despite some sentiments leaning against earning a degree.
Yet, the average federal student loan debt balance is $37,088, according to the Education Data Initiative (EDI). It takes a student loan borrower an average of 20 years to pay off their debt.
According to Moneywise calculations, $37,088 over 20 years with a 4.99% APR would end up costing you $74,101.82. That’s nearly the same amount as the median annual salary for a person holding a bachelor’s degree, according to the most recent numbers from the U.S. Bureau of Labor Statistics.
College graduates often end up negating their entire salary the first year after college in order to pay back their student loans. That’s time that a high school graduate, with no student debt, can spend saving up their first-year salary and putting it toward a down payment or other investments.
A report from Georgetown University’s Center on Education and the Workforce discovered that a quarter of people who received less education can surpass the earnings of those with more advanced degrees.
Meanwhile, Federal Reserve data states that 87% of those with a college degree reported being “okay” financially, whereas only 48% of those with a high school degree (or less) reported the same.
Although there’s still a gap, the sentiment in the Pew survey suggested that it may start closing.
Read more: ‘You didn’t want to risk it’: 80-year-old woman from South Carolina is looking for the safest place for her family’s $250,000 savings. Dave Ramsey responds
It’s the friends you make along the way
There’s a common phrase that people often say to job seekers: “It’s not what you know, it’s who you know.”
In college, that’s also true. Most of the U.S. political leaders have attended college for four years, such as Joe Biden (University of Delaware), Ron DeSantis (Yale), Barack Obama (Columbia) and Donald Trump (University of Pennsylvania). There they met other rich and influential people, who helped them ascend to powerful positions.
Yet, 50% of Republicans and 30% of Democrats don’t think a degree from a four-year college is essential to getting a high-paying job, according to the Pew study.
A 2022 paper in the journal, Science, discovered that high-paying jobs often come through “weak ties” — for example, people who are acquaintances. MIT Sloan professor Sinan Aral conducted the research on LinkedIn, using the “people you may know” feature to test this.
Although the study showed that “weak ties” can only work to a certain extent, they are a useful tool in the pursuit of a well-paid job. College acquaintances are a great example of a “weak tie.”
While it once was more likely that you would meet the next president or CEO at a four-year college, that may not necessarily be the case now.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.