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Running head: IS COLLEGE A GOOD INVESTMENT?

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Issue Paper Two: Is College a Good Investment?

Ama P. Agumeh

Rutgers, The State University of New Jersey

Reviewers: Michael Agumeh, Lauren Tong

Word count: 995

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The United States has seen rises in the cost of college education since the 1970’s. The

increase in cost of attending college has raised questions about whether college education is still

worth the cost. This debate goes as far back as the 1970s when critics of college education

including Freeman argued “that the huge investment in college education was wasteful and that

the surge in college attendance among baby boomers was sure to reduce the earnings of college

graduates in the future” (as cited in Carnevale & Rose, 2011, p. 9). More recently, the escalation

in the cost of college has put this issue back in the national conversation. While the recent rise in

college cost is indeed alarming, my view is that college education is still a worthwhile

investment and the benefits continue to outweigh the cost.

The cost of higher education began its accelerated rise in the 1970s. By 1980 the growth

in cost of tuition had overtaken the growth in median family income. Educational institutions

faced twice the rate of inflation for ten consecutive years. Observers predicted institutional

closures and lesser spending (Schuh, Jones, Harper, & Associates, 2011, p. 17). Benjamin stated

that by 1995, tuition and fees had increased by more than 100 percent compared with 1976 (as

cited in Woodard, Love, & Komives, 2000, p. 10). Following the 2008 recession, dwindling

government funding for public higher education have exacerbated the problem (Romano,

Losinger, & Millard, 2011, p. 211).

In light of the rising costs, many have argued that higher education is not a worthwhile

investment anymore. According to U.S. Department of Education, Federal Student Aid (2012),

“the cost of attending public four-year institutions has grown at a rate of 6.5 percent per year

from 2001 through 2010. The trend is similar across all sectors of postsecondary institutions” (p.

6). It has been estimated that the average student who graduated from college in 2011 had an

average student loan debt of $26,600. Critics argue that the increasing number of college

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graduates in the country who are having difficulty finding jobs is yet another indication that

investment in college is not worth it. With the unemployment rate at 7.8%, these graduates are in

no position to repay their student debt (Reed & Cochrane, 2012, p. 2). What then is the

justification for taking on so much debt to earn a college degree?

Based on my research findings, I personally believe that higher education is still worth

pursuing. “Since World War II and the expansion of postsecondary education, attaining a

bachelor’s degree has increasingly been considered necessary for economic prosperity and social

mobility” (Wells & Lynch, 2012, p. 671). The social inequalities and the hierarchical nature of

our society today (social stratification) has given higher education a big role in bridging the

socio-economic gap. The granting of credentials by higher education institutions to people in the

lower levels of the social hierachy promises better lives.

In fact, Goldin and Katz argue that “college graduates have emerged as winners in

today’s economy. The demand for more educated workers, coupled with relative slowdown of

their supply, has led to sharp increases in wage premiums of college degrees in the U.S. since the

1980s” (as cited in Roksa & Levey, 2010, p. 389). Carnevale & Rose (2011) point out that “it

turned out that the critics’ predictions were startlingly shortsighted. Instead of declining, earnings

for college-educated workers grew rapidly throughout the 1980s and 1990s, outpacing growth in

earnings of their less-educated counterparts” (p. 8). According to Koc, Koncz, &

Longenberger’s ( 2012) survey, the class of 2012 college graduates enjoyed an average starting

salary of $44,259, the difficult job market notwithstanding . The long term benefit of a college

education therefore includes much higher lifetime earnings.

Although employment rate could have been better in the aftermath of the 2008 recession,

the employment rate for bachelors degree holders as compared to those with a high school

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diplomas actually rose (Engmann & Wall, 2009, p. 4). Carnevale, Jayasundera, & Cheah (2012)

show that: “The recession hit those with less schooling disproportionately—nearly four out of

five jobs lost were held by those with no formal education beyond high school” (p. 4). Based on

these facts, college education remains the gateway to gainful employment.

The short term benefits of getting a college education also include an enjoyable college

experience. Involvement in extra curricular activities and participation in social and cultural

events that expose students to diversity which in turn contributes to the holistic development of

the individual. Furthermore, as college degree holders earn higher salaries, they tend to take

better care of themselves through very reliable health insurance systems. This therefore provides

them with better quality of life. To add to the above, people who earn degrees from colleges

usually are well-informed and tend to make good decisions that help to develop their society.

The high cost of college attendance presents social challenges as it affects first-

generation-low-income students adversely. The risk is that it will limit access to quality

education among students in low income households. It is therefore up to financial aid

professionals to educate students about existing funding opportunities and how to choose wisely.

This also raises the question of how student affairs professionals can raise funds to support

students. Woodard, Love, & Komives (2000) advise student affairs professionals to “ become

involved in acquiring funds from new sources, such as collaborative partnerships inside and

outside the institution” (p. 77). With the high cost of tuition, low income students will have to

work to support themselves through college. This will affect time spent for studies and will

eventually put students in negative academic standing. This is where academic advisors should

put in place effective support services to help students while enhancing their learning and

development.

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While rising cost is is a critical issue that should be addressed by both college

administrators and politicians, in my opinion, the benefits of getting a college degree still

outweigh the cost.

IS COLLEGE A GOOD INVESTMENT?

References

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Carnevale, A., & Rose, S. (2011). The undereducated American. Washington, D.C.: Georgetown

University Center on Education and the Workforce. Retrieved October, 2012 from

cew.georgetown.edu/undereducated.

Carnevale, A., Jayasundera, T., & Cheah, B. (2012). The college advantage: Weathering the

economic storm. Georgetown Public Policy Institute. Washington D.C.: Georgetown

University Center on Education and the Workforce. Retrieved October, 2012 from

cew.georgetown.edu/collegeadvantage.

Engmann, K., & Wall, H. (2009). The effects of recessions across demographic groups. Federal

Reserve Bank of St. Louis Review, 92(1), 1-41. Retrieved October, 2012 from

http://research.stlouisfed.org/wp/2009/2009-052.pdf

Freeman, R. (1976). The overeducated American. New York: Academic Press.

Koc, E., Koncz, A., & Longenberger, A. (2012). Salary survey: Starting salary for new college

graduates, September 2012 executive summary. Bethlehem: National Association of

Colleges and Employers. Retrieved October 2012, from

http://www.naceweb.org/uploadedFiles/NACEWeb/Research/Salary_Survey/Reports/SS

_ExecSummary_Sept2012.pdf

Reed, M., & Cochrane, D. (2012). Student debt and the class of 2011. The Institute for College

Access & Success. Oakland: Peterson's. Retrieved October, 2012 from

http://projectonstudentdebt.org/files/pub/classof2011.pdf

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Roksa, J., & Levey, T. (2010). What can you do with that degree?: College major and

occupational status of college graduates over time. Social Forces, 89(2), 389-415.

doi:10.1353/sof.2010.0085

Romano, R., Losinger, R., & Millard, T. (2011). Measuring the cost of a college degree: A case

study of a SUNY community college. Community College Review, 39(3), 211-234.

Schuh, J., Jones, S., Harper, S., & Associates. (2011). Student services: A handbook for the

profession (fifth ed.). San Francisco: Jossey-Bass.

U.S. Department of Education, Federal Student Aid. (2012). Federal student aid: Strategic plan,

fiscal years 2012-16. Washington D.C. Retrieved October, 2012 from Federal Student

Aid: Strategic Plan, Fiscal Years 2012-16:

http://federalstudentaid.ed.gov/static/gw/docs/FiveYearPlan_2012.pdf

Wells, R., & Lynch, C. (2012). Delayed College entry and the socioeconomic gap: Examining

the roles of student plans, family income, parental education, and parental occupation.

Journal of Higher Education, 83(5), 671-694.

Woodard, D., Love, P., & Komives, S. (2000). Leadership and management issues for a new

century. San Francisco: Jossey-Bass.