The moral of this story is simple. Don’t put on sunscreen and you are going to get fried in the scorching hot afternoon sun. When it comes to your career and聽earning potential if you don’t get a degree, your job opportunities and earning potential is聽going to get fried.
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College students are paying more. They are taking on more debt. They are accepting worse jobs after they graduate and earning less than they did just five years ago. So how could it possibly be true that college is more important than ever?
The answer is sunscreen.
College in today’s economy is like sunscreen on a scorchingly hot afternoon: You have to see the people who didn鈥檛 apply it to fully appreciate how important it is. The same way a blistering sun both makes sunscreen feel ineffective and makes it more crucial than ever, recessions can both make a college degree seem ineffective and make it more important than ever.*
One of the confusing things about college is that it鈥檚 hard to keep straight its price, cost, and value. The sticker price of college鈥攖hat is, the published tuition鈥攊sn鈥檛 paid by most middle-class students, who receive grants, tuition breaks, and tax benefits. The average net price of a bachelor’s degree is still 55 percent lower than the sticker price today. For many students, tax benefits eliminate the full cost of an associate’s degree. College is much cheaper than advertised.
Published vs. Net Tuition: Bachelor鈥檚, Associate鈥檚 Degrees
The upshot is that, shockingly, the New York Fed found that the average “total” cost of a four-year degree isn’t much higher than it was 40 years ago.
Now, what about the payoff? This is where the story gets even more complicated. But thinking about sunscreen can help.
It鈥檚 a myth that the average wage of college grads is always rising. In fact, college-grad wages have spent as much time falling as rising since the 1970s. Real college wages fell between 1970 and 1982, rose between 1982 and the mid-2000s, and now they鈥檙e falling again. But everybody else’s wages are falling even faster. The “college premium” is still near all-time highs.
Again, consider the sunscreen. When it’s skin-blisteringly bright outside, ordinary sunscreen won’t get you the same results. That doesn’t mean sunscreen “isn’t worth it.” It means that however singed you feel in the morning, everyone without sunscreen got totally fried. This is what’s going on in the economy: Globalization, automation, debt hangovers … it all adds up to a scorching hot sun toasting the wages of middle America.
College is an investment, and like all investments, its results vary on timing and luck. But the chorus of alarming stories about student debt and a glut of degrees tends to obscure the empirical reality that it is practically impossible to prove with data that college doesn’t pay off for the vast majority of Americans who finish their degree.
*Pedantry Preemption:聽This is a terrible metaphor, because college isn鈥檛 like sunscreen. Sunscreen is applied preventatively to maintain skin health while higher education is purchased as a ticket of entry into a category of college-level jobs, which makes it enhancing rather than preventative.聽Yes. There are lots of other ways that college isn鈥檛 like sunscreen (e.g.: it cannot be sprayed, it does not make your eyes sting, etc.). This is a metaphor about opportunity costs.
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