By Jim Wolfston
Promoters of higher education often point to differences in lifetime earnings to justify the price of higher education. Pay for an education today, and the “investment” will pay for itself over the student’s lifetime. Not only will the student make more money, but his or her career will be far more satisfying.
But with the cost of higher education skyrocketing, many families are beginning to question whether a college degree is worth the price. The arithmetic is persuasive. At the stock market’s historical 9% annual return (nominal return over the past 50 years), $100,000 not invested in a four-year college education would be worth over $3 million in 40 years. That return would handsomely eclipse the nominal lifetime earnings difference of $1 million often quoted for college vs. high school graduates. Put aside the fact that the four-year degree is being slowly replaced by the five-year degree, which bumps the cost of higher education even higher.
The new book “Academically Adrift” reveals that college has changed. And because of this change, the historical earnings advantage imparted by a college education may not hold up. By testing students longitudinally using the well-respected Comprehensive Learning Assessment, the authors show that irrespective of institutional quality and prestige, little or no academic skill advancement is now made through a college student’s sophomore year. The authors cite declining rigor in academic pursuit by students as a major factor. Students now put in only half as much time per week studying as college students did four decades ago. And yet, owing to a kind of insidious feedback loop where faculty pay depends in part on student evaluations, grades keep going higher.
Billionaire Peter Thiel, founder of Paypal, is one of the skeptics. His foundation is now offering stipends to promising young entrepreneurs encouraging them not to attend college. Critics point out that Mr. Thiel’s own success owes at least in part to the education and connections he formed at Stanford. His formal education includes a bachelor’s degree in philosophy followed by a law degree. Could his critique reflect a lack of self-knowledge?
The simple fact is that nobody can predict exactly how or whether a college education will matter in a person’s life. However, we’re probably safe to predict that the amount of information we will need to absorb, understand, critique, explain and write about will only grow. And we’re also safe to predict that innovation will continue to spring from the unpredicted and disparate combinations of ideas we are capable of drawing upon. Interestingly, these are the hallmarks of a great college education: learning a diversity of ideas and growing the capacity to understand and critique them.
Yes, attending college is now an increasingly risky economic bet. But if you’re going to go for it, make sure you stack the odds in your favor by pouring yourself into your studies aggressively.
Jim Wolfston is the president and founder of CollegeNET Inc.