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Reassessing the Value of a College Degree in a Recession

by Justin Marquis Ph.D.

Despite the economy slowly rebounding, times are still tough for millions of Americans and the thought of taking on debt in the neighborhood of $24,000 for a higher education is daunting for most. Some are even starting to question the value of that investment. As a strong advocate of higher education for all, I agree with the majority opinion that having a higher education, particularly during tough economic times, is an advantage. The graph below demonstrates the post-graduation employment rates for those with different levels of education (NY Times, 9 Jan., 2013).

Even with the relatively more optimistic outlook for those with a higher education, does the outlay of thousands upon thousands of dollars for a modest 18 percent advantage over those with a high school diploma justify the advantage when 4-year college graduates are still facing a 35 percent unemployment rate? Because of the long-term benefits, the answer must remain "yes." But that doesn’t mean you need to dive into a college education blindly. In fact, there are things that you can do to make sure that you do receive a better than average return on your investment while minimizing the initial investment as well. Here are a few suggestions:

Be a Savvy College Shopper
In my January 22, 2013 post "The Rise of the Edu-sumer," I presented a series of tips for the college search and application process based on a set of guidelines from the U.S. Consumer Protection Agency. Among them are: decide what you can afford in advance; conduct research on the institutions you are applying to; find out if others have had a positive experience; make sure the program is accredited; and comparison shop.

While doing these things will not guarantee you employment upon graduation, they will help to ensure that you can afford to repay your student loans (or eliminate them all together) and that you will be getting an education that best fits your financial circumstances while meeting your career aspirations. Your college education is a huge investment so it makes sense to get the most from that venture that you can. One way to do that is to really put the effort in to researching all the schools and your own means and goals in advance of committing.

Think about the Alternatives
Every prospective college student has heard of MOOCs. Some of you have probably even taken some free online courses through one of the main providers like Udacity, edX, or Coursera. What you may not have known is that some universities (with more sure to follow) are starting to give students credits for the work that they have done in these massive free classes (Inside Higher Ed, 23 Jan., 2013). As a student looking to make the most of their investment in higher education, you simply cannot pass up the opportunities available to chop thousands of dollars off of your final tuition bill for every free or drastically reduced-price course you can take.

While not every subject is offered for free online via a MOOC, there are other low cost options available that can still save you substantial amounts if used properly. One option is StraighterLine which offers many low cost courses in addition to their $99 per month college starter program and their courses are generally easier to get transfer credit for than most MOOCs. Another option is Udemy, which offers both low cost and free courses taught by some excellent faculty.

Expand your Horizons
Once you have entered a college or university it is time to begin thinking about life after graduation. That is not to hurry up your college experience; you should take the time to enjoy it. But thinking about employment opportunities while you are taking classes will help you focus and determine which classes are the most important for you to invest your time and money in.

That said, you should be thinking about and researching possible fields beyond the usual suspects of business, law, and international studies. Think outside of the box about new areas that are opening up and that may interest you. Particularly look at areas that combine multiple traditional fields and rely heavily on innovation and problem solving such as cyber security and nanotechnology. Look for opportunities that are appealing to you, but ones that others may not even have heard of. You’ll have a big advantage on the job market, and you never know when an entirely new type of position may arise. Working in multiple disciplines simultaneously sets you up for success in several areas at once.

Start Working Before You Graduate
Looking at the information about the percentage of unemployed new college grads is disheartening. No one wants to graduate and move back home with their parents. Increasingly, new grads are being forced to create their own businesses or non-profits in order to have a place in a world that seems to have no place for them (NY Times 11 Dec., 2011). While the Times article suggests that recent grads start their own businesses, an even better strategy is to start a business while still in college.

Whatever your idea, creating your own company will set you up for the post-graduation world in a number of ways. First, you will already have a job, and possibly a career, and thus can avoid the entire job search rat race right off. Even if your company isn’t successful, having the experience of failure is a critical step in the learning process. Not only will your failure help you develop long-term strategies for success, but having started a business will show potential employers that you are motivated, creative, and ambitious – all traits that are very appealing in prospective employees.

Putting it All Together
Many of these suggestions, such as starting your own business, may seem to indicate that you really don’t need to go to college at all. Not true. The data shows that the likelihood of your being unemployed without a college degree is far greater (NY Times, 9 Jan., 2013), and your lifetime earning potential is substantially diminished as well. So at the most basic level, attending college is a benefit even if you have aspirations to be your own boss.

The college experience not only gives you theoretical knowledge and practical skills in the areas that you study, it also helps you make future business connections, and cultivates a way of thinking about the world as a big picture. This expanded idea of the world in which you live and the possibilities therein will help you develop ideas, solutions, and products that address problems or needs in new and innovative ways. Innovation is the key to success in a global, knowledge-based economy, and attending college will help you become the kind of innovative thinker who can be successful.

So I urge you to attend college or a university. But do it intelligently. Shop for the best fit for you and take the steps above to set yourself up for long-term success in the world after graduation. You won’t be sorry you did.

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