If you have a bachelor’s degree, you’ll probably earn more than your peers with just a high school diploma, but not by much, according to a new study by the Federal Reserve Bank of New York released yesterday, the Wall Street Journal reports.
The median salary for a college grad was $40,000, the Fed said, compared to $25,000 for people with just a high school diploma. However, the bottom quartile of salaries for college grads was only about $27,000, which isn’t much more than the median earnings for high school grads and is making some people question whether college is really the good “investment” they are being led to believe.
Michelle Polyakov, for example, graduated in May with a bachelor’s in English and education. In the process, she accumulated $30,000 in debt and has so far unsuccessfully applied for 50 teaching jobs. “It’s just extremely disappointing and aggravating to have paid all that money and have nothing to show for it other than debt,” the Journal quoted her as saying.
As a result of her inability to find a job requiring a degree, Ms Polyakov is now looking for a job in financial sales, which requires smarts but not necessarily a degree. When college grads take jobs that don’t traditionally require a college degree, such as a barista or retail clerk, they’re said to be “underemployed.”
But not all non-college jobs are the same. You don’t need a college degree to be a dental hygienist, for example, the IB Times points out in analyzing the same research from the Fed.
The unemployment rate for recent college graduates is trending down, which is perhaps one bit of good news in all this. It hit a high around 7 percent in 2011 and is now a little higher than 5 percent, the IB Times reported.
At the same time, though, the underemployment rate for recent college grads is trending up, hovering around 46 percent for 22- to 27-year-old college graduates, while the underemployment rate for all college graduates is around 35 percent, which is still pretty high.
The cost of attending college in the US is also trending upward at this time, and more than 70 percent of college students graduate with loans. Their average debt is more than $33,000, and one in 10 borrowers is 90 days late on payments. A recent survey by Gallup and Purdue University found that debt levels higher than $25,000 have a “significant impact” on well-being even years after the debt is paid off. College students apparently haven’t read that survey, since they continue to borrow money to pay college tuition, fees, and related expenses.
The University of Illinois, Urbana-Champaign, is even trying to make it easier to complete school without accumulating so much debt: Since Illinois residents are turning away from the state’s flagship university at higher rates these days than in the past, the university has decided to try to provide more financial aid for in-state students, the Chicago Tribune reports.
For me, the whole “economic return on college investment” storyline pales in comparison to the non-economic gains of finishing an entire degree program, but there’s a whole group of people, I know, who think the only point of college is to earn more money. While this belief is fundamentally different from my own, none of us can deny the fact that a bachelor’s degree remains the closest thing the US has to a class dividing line.
College grads do earn about $300,000 more over the course of a lifetime than high school grads, the latest study found. But they also are less likely to have children out of wedlock, the New York Times reported in 2012, and more recent articles in other newspapers (great graphics in The Atlantic) support the idea that more and more young women who aren’t college graduates seem to be having kids out of wedlock these days.
