College degrees certainly aren’t dropping in price, but are they declining in value?
Many Americans consider a college degree to be the ultimate door to opportunity: a well-rounded education, a good job, and, ultimately, a comfortable income. Sure, someone with a bachelor’s degree earns an average of 1.6 times more than someone who only possesses a high-school diploma. But as many young Americans are finding, it’s not all sunshine and roses after college graduation.
Despite the fact that the cost of post-secondary education is at an all-time high, an alarming number of college graduates find themselves underemployed, working in jobs that do not necessarily require a college degree.
According to “Why Are Recent College Graduates Underemployed?,” a report from the Center for College Affordability and Productivity, nearly half (48%) of U.S. college graduates are in jobs that the Bureau of Labor Statistics suggests require less than a four-year education. Another 37% of employed college graduates are in jobs that require no more than a high-school diploma. After four years of coursework and in many cases, accruing thousands of dollars in student debt, some graduates are limited to the same employment opportunities they had before they even enrolled in college.
In addition to the current state of the economy, there are a number of explanations for this trend, from the growing number of American degree-holders, to chosen field of study, to the institution attended.
Number of degree holders
The number of Americans with college degrees has increased significantly over the past several decades. In fact, the percentage of U.S. adults with college degrees in 2010 was five times greater than it was in 1950. We generally think of the growing availability of education as a good thing, but it should be noted that while the number of degree holders has grown dramatically, the number of jobs requiring degrees is not growing at the same pace. Data pulled from the U.S. Bureau of Labor Statistics shows that while there were 41.7 million employed college graduates in 2010, only 28.6 million jobs actually required a college degree.
Field of study
A student’s chosen field of study has a big influence on their employability and salary. For example, Bureau of Labor Statistics data shows that while an art history major has an average starting salary of $36,300 and an average mid-career salary of $62,400, an electrical engineering major makes about $60,200 right out of school and $102,000 further into their career.
The type of school attended also makes a significant difference in both employment and average salary. The CCAP study examines average mid-career salaries for graduates of three types of schools: elite private institutions (ex: Harvard and Northwestern), state flagship institutions (ex: Michigan and Rutgers) and finally mid- or lower-tier state schools (ex: San Jose State University and Chicago State University). Results show that mid-career salaries are significantly higher for elite private institution grads, at $104,959, followed by state flagship universities at $87,274, and mid- to low-tier institutions trail with average salaries of $67, 063.
Between the record number of college graduates and career trajectories for various majors and alma maters, the value of a college degree seems to be in flux. Worried about incurring student debt only to land in a job you are overqualified for? Check out our list of resources for making smart decisions when it comes to college and student loans.