Perspectives: The Value of a College Degree
The long-term financial and social benefits of starting – and finishing – a college degree must align with your long-term objectives and goals to hold any value.
Earning a college degree is a powerful symbol of hard work, dedication, perseverance, and future potential. For many generations, a bachelor’s degree was the guaranteed pathway to a satisfying career.
But as of 2022, only 37% of Americans aged 25-64 had completed a bachelor’s degree. Coupled with a long-term low unemployment rate and an inability to fill key roles to support growth, companies across the US are revisiting job descriptions – and deciding that in many cases, a degree is unnecessary for success.
Historically, a bachelor’s degree was seen as a proxy for collaboration skills, a sense of initiative, and an ability to think critically. But there is a lack of evidence to support this notion. In fact, when a team from Harvard Business School and Accenture partnered together to analyze “middle-skill” jobs (which required some education or training beyond high school, but not a four-year degree), they found no boost in productivity when the jobs were completed by college graduates.
As a result, organizations are evolving and opening their doors to those without a degree. A decade ago, IBM struggled to fill key roles. In 2012, less than 10% of their U.S.-based roles were open to applicants without a college degree, regardless of other qualifications. The launch of the SkillsFirst Initiative revamped hiring practices within IBM to create better on-ramps and training programs for those without a college degree. The primary change: removing the requirement for a college degree across nearly 80% of new and existing roles, instead listing desired skills and attributes for the core capabilities of the job.
And so, for students considering an investment in their education, if a degree isn’t a prerequisite for a career, what is the value of a college degree?
The Cost of College
As of May 2024, the average cost of college in the United States was $38,270 per student per year, including the cost of books, supplies, and daily living expenses. This amount has more than doubled in the 21st century, with a compound average growth rate (CAGR) of 4.11%. Considering student loan interest and loss of income, an investment in a bachelor’s degree can ultimately cost students more than $500,000. (Data courtesy of Education Data Initiative)
While state and federal programs mitigate some of these costs for students, the rising costs of tuition and associated expenses is a serious problem. From a financial perspective, does the investment in a college degree still make sense?
Today, the answer is mostly yes. According to a June 2023 analysis published by the Institute for Higher Education Policy, a nonprofit research group based in Washington, D.C., there is “overwhelming evidence that pursuing a college degree provides substantial economic and non-economic benefits to students.” Approximately 93% of college undergraduates meet a minimum economic return. Meaning, 93% of college undergraduates, within ten years, earn at least as much as high school graduates from the same state, plus enough to recoup the total cost of attending college.
However, meeting the minimum threshold isn’t the outcome college graduates look to achieve. Additional financial benefits for college graduates historically include:
Higher earnings and more wealth accumulation
More likely to own a home
More likely to have job with important benefits such as health insurance, paid vacations, retirement plans, and flexible work arrangements
As companies evolve their hiring, training, and benefits practices, these economic gaps will close. The financial investment may make sense today, but the long-term value of a college degree will be determined on key components of the college experience: cultivating a growth mindset for life-long learning and creating differentiation from professionals without a degree.
A College Degree is the Starting Line, Not the Finish Line
The value of a college degree cannot be measured by the value of the ultimate finish line – there are simply too many variables and decisions that impact the outcomes of a career.
Rather than think of a college degree as the finish line for the rest of your career, consider that a degree is the starting line for a lifetime of learning and the culmination of skills, experiences, and achievements along the way.
At the core of lifelong learning is the growth mindset—the belief that skills and intelligence can be continually developed and improved across both formal and informal learning. This mindset is a powerful driver of success: encouraging challenges, learning from criticism, and persisting in the face of setbacks.
Cultivating a growth mindset means viewing experiences, whether positive or negative, as an opportunity to learn and improve. This perspective transforms obstacles into learning experiences and fuels the motivation to keep pushing forward.
Stepping to the starting line, there are three key values of a college degree that are difficult to replicate in alternative paths:
Near-infinite opportunities for skill-building
Development of personal and professional networks
Creating transformative self-awareness
#1: Majors Don’t Matter – Skills are Critical
More than half of college graduates do not end up working in the field of their college major or degree. Rather than worry about a major course of study, focus on building and learning necessary concepts in a compelling topic, then applying and evaluating the resulting skill. It’s a simple methodology: learn the concept, see it in action, do it yourself.
This methodology is at the heart of every vocational-based educational program – from automotive work to medical doctoral programs. They’re inherently skill-based, teaching you the fundamental concepts, how to think and act, and then practicing the resulting skill until you have mastery of it.
Many undergraduate programs lack the application component for their degree programs. For instance, a business major will likely master concepts in finance, marketing, management, and economics, but will have little to no experience applying the concepts into skill-driven abilities.
Instead, find opportunities to practice the application of academic concepts into real-world skills. Opportunities can come in many forms – internships, apprenticeships, peer modeling, and training programs specific to skill-building. Then showcase the best and strongest skills. Get creative. Combine them in unconventional ways. This will set a college degree apart from non-degreed colleagues – and create immense value from a degree program.
Hard Skills and Soft Skills are Equally Valuable – But You Need Both
Hard skills are technical or specific abilities required to perform a job. They are often acquired through education, training, certifications, and on-the-job experience. These skills are about your ability to perform specific tasks and functions. Hard skills are usually specific to a particular job, task, or industry. While some hard skills can be transferable to other fields, they often have a direct application in a specific context. Hard skills can be more objectively measured than soft skills, through tests, certifications, task performance, or demonstration of knowledge and abilities.
Soft skills are interpersonal or people skills. They relate to how you work and interact with others, your emotional intelligence, and personal attributes. These skills are about behavior and thinking, personal traits, and cognitive skills. Soft skills are highly transferable and applicable in a wide range of situations and careers. They are not specific to any one job or industry. Developing soft skills often involves improving one's emotional intelligence, gaining experience through diverse social interactions, and continuous reflection and practice in everyday life.
Neither skill type is more valuable than the other and each have a role to play across a career. Hard skills will demonstrate the qualifications for a role; soft skills will pave the road of success.
#2: Who You Know – and Who You’re Associated With – Matters
One of the most valuable components of a college degree is the nearly automatic network created from matriculation to graduation. Few other associations in the professional world have the depth and breadth as a college networking group.
During the college years, a network of relationships with peers, professors, and mentors is built. These connections provide support, guidance, and opportunities that can significantly impact the classes, programs, and skill-building accomplished during a degree program.
At graduation, an active alumni program will provide the similar opportunities out in the field, opening doors to new organizations and roles, and building support and camaraderie among the alumni base.
Relating to and networking with others is a crucial skill in the professional world, and the relationships cultivated throughout a degree program serve as a foundation for an early and robust professional network.
#3: Transforming Personal Growth into Professional Direction
A college journey is a transformative experience, shaping people in ways that go far beyond academics. While the knowledge and skills gained are vital, personal growth is equally significant.
College is a time of self-discovery. Navigating different courses, extracurricular activities, and social interactions opens opportunities to learn and cultivate strengths, weaknesses, interests, and values. Understanding personal motivation, stress management, and impacts of a work environment are critical discoveries for college graduates. This self-awareness is crucial to guide career decisions and the path that aligns with professional goals and objectives.
Grit and Resilience: Building Strength Through Challenges
College life is filled with opportunities to build grit. From managing heavy course loads, to meeting deadlines and overcoming academic difficulties, college graduates learn commitment to goals despite obstacles. This resilience is a powerful trait that will serve you well in the professional world where persistence often determines success.
Delayed Gratification: The Power of Patience
Earning a college degree is a testament to the ability to practice delayed gratification. This ability to prioritize long-term objectives over immediate rewards is a crucial skill in the professional world.
Delayed gratification shows specific skills: setting goals, developing a plan, and sticking to it, even when the rewards are not immediate. It demonstrates discipline, focus, and commitment. In a world that often seeks quick fixes and instant results, the ability to work patiently towards specific goals is a differentiator.
Adaptability: The Skill to Continually Learn, Reflect, and Adapt
One of the most important messages a college degree conveys is an ability to be trained. Completing a degree program demonstrates the ability to learn complex material, adapt to new information, and continuously improve skills.
Employers look for individuals who are not just knowledgeable, but also capable of learning and growing within their roles. A college experience focused on building skills equips graduates with the ability to absorb new information, think critically, and apply learning in practical ways.
The Decision to Pursue a College Degree
A college degree is the starting line toward a professional career, not the finish line.
And it’s not the only road to achievement.
The decision to pursue a college degree is a personal one. This decision should stem from personal goals and objectives, and should get specific. For example, financial independence is a great goal, but it’s too broad for decision-making. Think about how you want to achieve your goal - financial independence - and set those as your objectives. From there, make the decision: does the $500,000 investment in a four year degree make sense in light of personal goals and objectives? Think through the opportunities and risks associated with that investment and how these align or conflict with career aspirations.
For some, the investment in a college degree is clear and aligned to specific, highly tuned career goals where a college degree is expected, if not required. The economic and non-economic benefits exceed the value of investment, even if things don’t go to plan.
For some, the investment in a college degree can make sense, but requires additional work and focus to capture the value from applying skills, developing networks, and creating self-awareness. In these situations, look for additional support and programs that can mitigate risks of the investment. Starting with a two year degree, reducing the financial commitment, and committing to activities that boost skill building, networking, and self-awareness help mitigate investment risk.
For some, the investment in a college degree is too risky due to the high upfront financial burden and uncertainty about how to capture short or long-term value. For these situations, there are many alternative paths recognized as worthy, valuable, and sound decisions.
No matter your path, make the decision to engage in lifelong learning and professional development. The world of work is evolving, and staying current with new knowledge and skills is crucial. It is likely that a role that you fill in five years doesn’t exist right now.
Many industries offer opportunities for further education and certification. Whether through advanced degrees, professional courses, or on-the-job training, your commitment to continuous learning ensures your long-term success and satisfaction, no matter your investment in a college degree.