skynesher via iStock Photo
By Isabella Yalif
In 2011, the sentiment surrounding secondary education was largely positive. 86% of college graduates believed college was a good investment. Now, only 42% of those with college degrees regard their decision as worth it. The impacts of this ideological shift have been significant and swift: as early as 2021, 2.5 million fewer undergraduates enrolled in a college or university than in 2020. Community colleges felt the most significant effects, experiencing a 13% enrollment drop since the beginning of the pandemic: an unfathomably large reduction in such a short period.
When deciding whether to continue on to secondary education, young adults often turn to the college wage premium. This indicator is the ratio of the median hourly wage of those with a bachelor’s degree and those with solely a high school degree. Since the 2000s, the indicator has hovered around 60% when looking specifically at college graduates who did not go on to postsecondary education. As Paul Tough from the New York Times writes, “college seemed like a reliable runway to a life of comfort and affluence.”
Recently, a new indicator has been gaining influence in the higher education debate. The college wealth premium examines the ratio between the net wealth of the typical college graduate over their lifetime and that of a high school graduate. The wealth premium adds crucial information that puts earnings in the context of one’s assets and debts.
A 2019 Federal Reserve study revealed that across all ethnic groups, the wealth premium has significantly decreased in the past few decades, getting very close to zero. For non-Hispanic white Americans, the predicted wealth premium is a mere 42% for those with a bachelor’s degree born in the 1980s. This number is down from 247% for those born in the 1930s. Even more starkly, the predicted wealth premium for non-Hispanic black Americans is 6% for those born in the 1980s, compared to 509% for those born in the 1930s. These statistics demonstrate that college may not be the safe bet it once was for attaining wealth. These results are causing many young adults to ponder whether a college degree will prove more beneficial than if they enter the workforce with just a high school diploma.
A key driver behind the wealth premium decreasing is how much more expensive college has gotten over the past few decades. A century ago, college was nearly free. Today, college is certainly not free, as the average yearly tuition at a private university is $55,840. Similarly, a public four-year in-state institution costs $26,027 per year. While affording college looks different for many, it is important to remember that life in college is also different. There are many minority groups who are no longer kept out of higher education, which, combined with other changes such as technological advancement, may create a vastly different college experience compared to a century ago. Research on this multifaceted generational change reveals that the shift has made it significantly harder for people born in the 1970s and 1980s to accumulate wealth than those born fifty years earlier.
William Emmons, one of the authors of the Federal Reserve study, eloquently frames the college-or-not wealth dilemma: he states, “college boosts your income while colleges extract your wealth.” What Emmons means by this is, going to college generally results in higher income. At the same time, specific colleges are realizing they can charge more for this experience, which may prevent wealth accumulation for their graduates. Lowell Rickets, another author, further expands on this concept of wealth extraction in an interview with the New York Times. He explains, “carrying debt obviously diminishes your net worth through simple subtraction, but it also can prevent you from taking important wealth-generating steps as a young adult, like buying a house or starting a small business.”
As the race-specific statistics above began to allude to, the risk associated with college is different for all who attend. Emmons’ team at the Fed found that having a parent who is a college graduate gives an automatic advantage for their child as they enter higher education. The team’s research also revealed that there are still lingering effects of discrimination in colleges and universities that might affect the value colleges are providing for previously excluded groups. Minorities may be entering institutions of higher education whose underlying processes make academics more challenging for them, putting the possibility of their success at an immediate disadvantage. These adverse effects are evidenced by Emmon’s findings that Hispanic and Black people’s college non-completion rates remain higher than that of white and other peoples. Further, degree-attainment gaps by race and ethnicity are rising for later-born generations. Emmons frames the severity of the situation by stating, “because college is becoming more important, these [college attainment] gaps undermine the narrowing of income or wealth gaps.” Thus, even as minorities are beginning to accumulate income and wealth more on par with other racial ethnic groups, secondary education institutions that are poorly designed to meet minority needs are sabotaging the benefits of the change.
Another significant edge that some students receive is attending an elite institution. Some families enter the college process with an “Ivy-or-bust attitude.” Jeff Selingo, a college admissions author, explains this phenomenon. He presents how some people see “the value of higher education in those biggest brands. If I can’t get into one of those biggest brands, then maybe it’s not worth going somewhere else [and] take on all this debt.” Bryan Caplan, an economist at George Mason University, further echoes this sentiment with his opinion that higher education is only worth it for “A” students in high school. What is underlying Caplan’s idea is that only the schools which one has to be an “A” student to get into, the elite institutions, are the ones that will have a strong return on investment and are therefore worth attending.
Additionally, the extent to which this negative sentiment towards higher education is pervasive in Americans varies based on political affiliation. A Pew survey on American confidence in higher education revealed that starting around 2015, increasing numbers of Republicans believe that colleges negatively affect the country. Democrats have not reflected this shift and still view higher education mainly positively. The Pew article analyzes their findings in conjunction with data from other supplementary surveys to determine that the main reason for this shift is that Republicans believe that campuses are becoming too focused on politics, and those politics lean liberal. Caplan gives his opinion on the situation, stating, “colleges have squandered a lot of goodwill by pushing a dogmatic left-wing religion.” This liberal push might be alienating many Republicans from the prospect of attending higher education.
The downturn in enrollment numbers is affecting institutions of higher education nationwide. For example, the University of Minnesota system has seen a 13.9% decline in undergraduate enrollment since the beginning of the pandemic at all campuses except for Twin Cities, which saw a 2.6% reduction. Robert McCaster, the university’s Dean of Undergraduate Education, commented: “The percentage of Minnesota high school graduates who do not attend any college at all has now risen to close to 40%. That’s really an alarming number given the long term commitment to higher education in this state.” The message behind a senior staff member such as McCaster making this declaration of panic is clear: the problem is serious.
The impacts of the American disillusionment with high education have effects at the individual, community, and national levels. The job prospects for those who decide against college might be shrinking. Tough describes how “the fastest growing jobs available to those with only a high school diploma [are] low-wage service jobs.” This service job focus means that even if the young adults passing up college make a nice paycheck right out of high school, there is a high chance that is a similar paycheck to the one they will be receiving fifteen years down the road, with few opportunities for growth. At the local level, Doug Shapiro tells NPR that local communities are the most vulnerable to the negative impacts of someone not attending college because the local economy will not have enough qualified workers for their jobs. This trend also poses a major problem for the entire American economy. A 2019 American Action Forum study projected that the diminishing number of college graduates will lead to a nearly $1.2 trillion loss of economic output over the next decade. Further, having fewer college graduates could worsen the already problematic labor shortages in fields like healthcare and teaching. What all of these adverse effects demonstrate is that even as the prospect of not attending college is becoming more appealing for many, the impacts of a large-scale shift could be disastrous.
College used to be a critical step in achieving the American dream: uplifting individuals and giving them a chance at success. Having a well educated society is crucial for civic engagement and a successful democracy, and the democratic benefits are just a small portion of the massive value higher education holds to society. Will the effects of the anti-college sentiment directly impact Vanderbilt? It’s not likely as the university is protected under the title of “elite institution.” Nonetheless, the student population and everyone in the Vanderbilt ethos may still be affected as it is clear that the lost value from college graduates could have immense impacts at the individual, community, and national level. The country is entering a new understanding of college and how it fits into American life, and only time will tell just how intense the effects of this shift will be.
