For generations, students have been told that a bachelor’s degree will open doors for them in the future and that the benefits of a degree outweigh the costs of receiving it. Now, there seems to be some change in this sentiment. A majority of college graduates find themselves underemployed and question whether their college degree has any value. This article will discuss the change in attitude towards a four-year college degree, what brought about that change, and the potential benefits that remain to obtaining a bachelor’s degree.
Underemployment
Underemployment, where a graduate is working a job that does not require a college degree, is the most common problem graduates are facing. According to a 2024 study by the Strada Education Foundation, 52% of college graduates who entered the workforce are underemployed. The first job individuals accept after graduating is incredibly important. Those who start work at a college-level job are less likely to find themselves underemployed. The report found that 79% of college graduates found themselves still employed at a college-level job five years after graduating. After 10 years, 89% were still working in college-level positions.
The first job someone lands after graduating college appears to set the momentum of their career for years to come. Those who start out at a job that does not require a college degree are 3.5 times more likely to remain underemployed in 10 years. The Strada Education Foundation reported that 73% of underemployed individuals will remain underemployed 10 years after graduating. Underemployed adults may carry heavier financial burdens because they earn less than those who started out in college-level jobs. The study reported that a graduate who works in a college-level job makes 88% more money than someone who only holds a high school diploma. In comparison, underemployed individuals may only earn 25% more.
The Rising Cost of Education
Data from the College Board revealed that in 2022-2023, the average cost for only tuition and fees for a public in-state university was almost $11,000. Tuition for a private in-state university was over $39,000. According to the Education Data Initiative, only 40% of students graduate with their bachelor’s degree in four years, so these prices would be multiplied by five or six years to calculate the total cost of a bachelor’s degree. The cost for out-of-state students is even greater because the price of tuition nearly doubles. Financial aid can cover some of the costs of tuition, but it may not cover the complete bill. Financial aid will also not cover room and board for students who chose to dorm. This may result in the need to take out student loans to cover the rest of tuition, or to pay for room and board. According to the Federal Reserve, at the end of 2023 the average federal student loan debt an individual acquired to pay for their bachelor’s degree was about $37,000.
It takes the average borrower almost 20 years to pay back their student loans, according to Education Data Initiative. Student loan interest rates are higher in the 2023-2024 school year than they were ten years ago. At a 5% interest rate and a $37,000 loan, students are advised to pay over $400 a month to finish paying off their loan in under ten years. For those graduates who are underemployed, this goal seems unachievable.
More and more students are sharing the sentiment that a college degree may not hold as much value as it may have held years ago. Due to the rising costs of tuition, combined with loans that have high interest rates, and the alarming rate of underemployment, some students do not see the benefit of obtaining a bachelor’s degree. However, this attitude may be overlooking the possible benefits associated with receiving a degree.
Unemployment Rates are Lower in College Graduates
The Federal Reserve Economic Data of St. Louis reported that individuals 25 years and over with only a high school diploma, had an unemployment rate of 4.8% in January 2024. The national average for unemployment was 3.7% in January, so individuals with only a high school diploma had an unemployment rate 1% higher than the national average. In contrast, those who completed a bachelor’s degree had an unemployment rate of 2.4%. A bachelor’s degree is correlated with lower unemployment rates and economic stability. Statistics show that during economic crises, such as a pandemic or a recession, those without a bachelor’s degree experience greater job loss than those with a bachelor’s degree or higher. According to the Center on Budget and Policy Priorities, adults without a bachelor’s degree suffered three times as much job loss compared to those with a bachelor’s degree or higher in 2020 during the pandemic.
Not only is having a bachelor’s degree associated with lower unemployment rates, but it also may lead to more job opportunities. Northeastern University reported that college graduates have 57% more job opportunities available to them than non-graduates. Georgetown University on Education and the Workforce conducted a study that concluded by 2031, 171 million jobs will be added to the American job market. Of those 171 million, 42% of those jobs will be reserved for individuals with a bachelor’s degree or higher. Only 22% of those projected jobs will be available for individuals with no more than a high school diploma. While there will still be jobs available for those with only a high school diploma, those jobs will not generate enough income for upward economic mobility.
Networking Opportunities
College is also a time when individuals make connections and network with other students, professors, and advisors. These lifelong connections can bolster an individual’s career and help them land a job in an area they are passionate about. Through networking, students can share their experience, knowledge, expertise, and interest in their chosen career goals.
Internships
An internship may be a paid or unpaid work experience a student completes during their college career. This learning opportunity is structured and monitored by a professional in the field and students gain meaningful skills and experience through internships. According to the Strada Education Foundation, individuals who completed at least one internship during their college years had a 48.5% decreased risk of being underemployed in comparison to those who did not do an internship. This benefit was not specific towards one particular major, but true across various fields of study.
Internships are another form of networking since students are interacting with their colleagues and employers. Not only does the student sharpen their skills, but they are also making meaningful connections with professionals through hands-on work. In many instances, an internship can become a post-graduate job offer.
Higher Pay
Another attractive prospect a bachelor’s degree can bring is higher income. In 2023, the U.S. Bureau of Labor Statistics reported that individuals with a high school diploma and no college education earned $905 a week. Those with only a bachelor’s degree and no higher education received an average of $1,499 a week. The Federal Reserve Bank of New York reported that the median income for a person with a bachelor’s degree was $60,000 in 2023. The median income for an adult with a high school diploma was $36,000. National data shows that during a lifetime, adults with a bachelor’s degree have the opportunity to earn significantly more than someone with only a high school diploma.
The Bachelor’s Degree As a Steppingstone
The four fastest growing fields are healthcare, government services, STEM, and education. In order to reach jobs in these fields, a master’s degree or some form of a doctoral degree may be necessary. In some instances, a job opportunity that an individual goes after may not even consider an applicant who only has an undergraduate degree. Often, a bachelor’s degree is a stopping point on the way to a graduate degree. A master’s degree builds on the foundational skills learned during one’s time as an undergraduate by expanding and sharpening their knowledge and abilities; this gained expertise can help an individual excel in their area of study in a way they may not have been able to with just a bachelor’s degree.
Even if an individual stops their education at a bachelor’s degree, there are still certification programs and licensing requirements they need to complete in order to be eligible to work in their field of choice. Many times, these programs and licenses will not be available to those who do not have a four-year college degree. Whether the end goal is a doctorate’s degree in medicine, or a license to become a registered nurse, each job required a bachelor’s degree as a steppingstone to accomplish it’s professional aims.
Takeaway
While the value of a college education may appear to be dwindling, it is important to weigh the benefits associated with completing a bachelor’s degree. The negatives, such as the risk of underemployment and the cost of education, can be compared to the positives, such as the long-term benefits, economic stability, and job security. While a college degree is not as valuable as it has been in the past, a thoughtful analysis of its advantages reveals how important it is for individuals to get the ultimate goals out of their education.