Is higher education dead? Americans are reconsidering college, new study finds

Many Americans believe a four-year college degree is not necessary for success in today’s economy, according to a recent Pew Research Center study.

The survey of 5,203 respondents revealed a significant shift in attitudes, with 40% believing a degree is not crucial for securing a well-paying job, contrasted with only 25% who strongly believe it is.

Strikingly, 80% of those surveyed believed that people without a college education could land lucrative jobs.

The study found that nearly half (49%) of Americans see a college degree as less important than 20 years ago, while a third (32%) believe it’s become more important.

People are also less willing to take out loans for a degree, with 29% saying it's not worth the investment, compared to 22% who deem it worthwhile.

What’s causing the rift?

“At a time when many Americans are questioning the value of a four-year college degree, economic outcomes for young adults without a degree are improving,” wrote Pew researchers.

Since the economy recovered from the great recession in 2008, the median annual earnings increased by over $5,000 for men and women ages 25 to 34 with only a high school diploma, respectively.

The share of full-time employees rose from 69% in 2011 to 77% for men, and from 56% in 2014 to a record high of 69% for women.

Meanwhile, the cost of an undergraduate degree ballooned 169% while wages only increased by 20% between 1980 and 2020, according to a report from the Georgetown University Center on Education and the Workforce.

Student debt also skyrocketed 233% to $1.73 trillion in nearly two decades, as shown by data from Creditnews's student debt tracker.

The value of a degree

While a hefty student loan is a big turnoff, data shows that a college education gives people resilience against economic downturns and higher wages in the long run.

The Pew Research Center study showed that young men and women with a college degree make $32,000 and $29,000 more per year, respectively, than their non-college counterparts.

Meanwhile, full-time employment for college graduates has remained steady at around 80%, regardless of economic cycles.

Income gaps between college and non-college workers have also hovered at above 70% over the past 10 years.

The median net worth of households headed by young college graduates is $120,200, nearly four times higher than those led by high school graduates.

“Jobs for people without college degrees that pay over $130,000 a year make up 1% of the American economy,” said Anthony Carnevale, director of Georgetown’s Center on Education and the Workforce.

In the long term, the US college wage premium doubles over the life cycle, from 27% at age 25 to 60% at age 55, David Deming, economist and a professor of public policy at the Harvard Kennedy School, wrote in a paper last year.

“College acts as a gateway to professional occupations,” he explained. “Wages increase with job tenure much more in professional, non-routine occupations, which are disproportionately held by college graduates.”

So, college or not?

Education experts say whether a college degree pays off depends on the program and the career path.

Garrett Andrews, from the Department of Political Science at Portland Community College, said students should look closely at each school's program and the overall costs.

“Think about the salary you’ll likely earn in your desired profession and how quickly you’ll be able to repay your loans,” he wrote in Forbes last month.

HEA Group, an education research and consulting firm, warned in their recent analysis that some colleges may not help students earn more than someone with a high school diploma.

Looking at graduation rates and salary data for a program can show if the degree is worth it long-term, said Michael Itzkowitz, founder of the group and former director of the Department of Education's College Scorecard.

"There are so many colleges beyond the Ivy Leagues that provide good outcomes for their graduates at affordable prices," he said.

"The larger public colleges across the U.S. enroll the vast majority of students and provide good outcomes at an affordable cost."