the caveat to whether college is worth it

Is College Worth It? Clearly, New Data Say.” So reads the headline, and what follows does not surprise:

The pay gap between college graduates and everyone else reached a record high last year, according to the new data…Americans with four-year college degrees made 98 percent more an hour on average in 2013 than people without a degree. That’s up from 89 percent five years earlier, 85 percent a decade earlier and 64 percent in the early 1980s.

You hear this a lot. And at one level, it’s absolutely true. But what the payoff-to-college headlines often miss is that it’s graduating from college that is worth it. The NYT’s own chart implies this, though the piece never makes the connection. The earnings of people with some college have hovered around 1.1 times those of HS grads since 1975, while earnings of those with a 4-year degree have increased from about 1.45 to 1.8 times those of HS grads.*

What doesn’t help, and in fact makes things worse, is taking out loans to go to college but then failing to finish. Your income goes up almost none, but now you have debt. About 44% of students who start a four-year degree don’t finish it within six years. I couldn’t find quick numbers on the percentage of dropouts who have loans, and of what size, but 29% of those who borrowed between 2003 and 2009 dropped out by the end of that period.

The problem is that the policy takeaway of “College is a great investment!” is 1) let’s get more people into college and 2) let’s get more people to finish college once they start. But the people who aren’t now starting college after high school — the ones we might get to enroll — look an awful lot like the students who drop out with debt. It seems entirely possible that a heavy focus on increasing enrollment would create more indebted dropouts than successful graduates.

The second part makes more sense. Here, though, the incentive is usually to improve graduation rates by making it easier to graduate, rather than by improving students’ academic performance. Assuming that the point of college isn’t just to keep people off the labor market for a few more years, we need ways to offer students support while raising standards.

But how do we actually do that? I don’t have a great answer. One possibility might be to push community colleges and four-year programs in different directions. Keep community college as cheap as possible. Let people try multiple times if they need to, or move in and out as their life circumstances change. Ignore completion rates entirely.

Then for the four-years, raise standards — on both the front end and the back end. Accept that a four-year degree comes with a certain level of indebtedness for most people these days, and that most people will be worse off if they start (and borrow money) but don’t finish. Don’t emphasize “access” for students who are likely to end up in that position — send them to the low-cost option and tell them to prove themselves before they take on big debt. Provide support for the students you do accept — financial, academic, and to help with the kinds of small but potentially derailing crises students of modest means are likely to encounter. And then hold colleges accountable for completion rates.

I don’t really like this option. It limits access while not actually fixing the incentives to water things down. Given the current loan-driven, state-disinvestment model we’ve got, though, I don’t see better ways to minimize the number of dropouts with debt** while increasing, rather than reducing, the rigor of college.

* The income of HS grads, interestingly, has remained basically flat during this time — dropping from $33,500 to $32,600 in 2012 dollars. See data here; I adjusted for inflation. I expected it to drop more — but changes in the demographic mix may explain that.

** Doing something about for-profits, which have terrible numbers on this, would certainly help.


Written by epopp

May 27, 2014 at 5:08 pm

17 Responses

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  1. When I first saw the title, I was sure this was a Fabio post. You fit right in, Beth!

    I agree with many of your points, but wanted to point out something about the NYTimes piece that I took note of this morning, and that is that the graph compares people with a “college degree” to others with “some college.” Although that matters little when the article fails to focus on the key issues you bring up, I think it is a very important difference from others who have compared those with only high school to those with college.

    Something that I think could make a real difference in helping students graduate is making completion a good investment for colleges and not just graduates. Increased attention to completion rates in rankings and external funding, increased reliance on donations for endowments, and other incentives like these might be the key to doing that (If colleges and universities were the people actually doling out the loans – and actually being defaulted on – that would work too). One of the two community colleges that I attended paid real attention to this, and offered explicit resources to help students succeed and graduate. I also found the financial counseling at my first university (a very small school, with a religious mission) extremely in-depth. They not only talked about loans and grants but helped me secure a work-study job, explaining how this would allow me to pay my share of college costs, and walked me through various housing/board choices to select the best for me. The university I graduated from (a smallish public teachers college), on the other hand, just sent me paperwork letting me know how much aid I was eligible for and how to apply for it. There were 5 years between those two colleges, so the differences could be exacerbated by a shifting climate of student-borrowing (which seemed more acceptable as the ’90s wore one), but I imagine that the smaller, private school had more at stake for me being able to pay for college and therefore complete my degree and that made them work to make college a good investment for them (and for me).



    May 27, 2014 at 5:36 pm

  2. “When I first saw the title, I was sure this was a Fabio post. You fit right in, Beth!”


    Serious comment: We have to distinguish between those who can graduate if given the proper resources and those who can’t due to low maturity or academic ability. Throwing more loans or money at colleges without doing our homework is not good.



    May 27, 2014 at 5:42 pm

  3. What Fabio said.

    But also, the article glosses over the fact that money isn’t everything. Having a career that fits your interests might be possible without attending college, and that is “worth it.”


    Chris M

    May 27, 2014 at 8:11 pm

  4. Matt Yglesias (here) has further caveats, e.g., “To understand whether college is “worth it” — or, more precisely, which colleges are worth it to which students — we would need some much more fine-grained data. How do college graduates fare in the labor market compared to people who were otherwise similar at age 18 in terms of SAT scores, non-cognitive skills, parental socioeconomic status, etc.”


    Jay Livingston

    May 27, 2014 at 8:22 pm

  5. Jessica, I agree with your point about colleges needing more skin in the game. A couple of years ago there was a “Fix UC” proposal going around ( that got some press. The idea was that UC would be free up front, then you’d pay 5% of your income -to the university- for 20 years. (Oregon’s “Pay It Forward” program, which is now actually a pilot ( , uses a similar funding model, but the money doesn’t go to the colleges.)

    It’s interesting to think through the implications of a program like the UC proposal, could one implement it. Universities would certainly have much more incentive to invest in the long-term success of their students. What I don’t like is that it makes income the only measure of success. But right now colleges, beyond the handful with significant alumni donations, don’t really have any incentive to do what’s best for students in the long run.

    Of course, another way to solve this is through a professional culture that puts students first. Many community colleges do have this. Unfortunately, the tight job market and the professional status of research v. teaching means that many teaching-oriented colleges are moving toward more focus on research. This seems unlikely to help.



    May 27, 2014 at 9:16 pm

  6. This is one issue where I just don’t get where people in sociology are coming from. Is college “worth it?” Nobody seriously believes otherwise and not a single one of the “critics” would ever sentence their own children to Matty Yglesias’ (above) “no college” control group. (I don’t know if Fabio has kids, but, if he does, he will *of course* send them to college.)

    So, a lot of talk and hand-wringing about…what precisely? My impression is that in the world of the soc critics here, nobody should ever flunk out, fail to complete, or otherwise have a rough time of it in college. In addition, students shouldn’t be allowed to make the “mistake” of giving it a whirl only to find out that they are not cut out for it or that it is otherwise not for them. If my impression is correct, I have to say that I am baffled by this mindset.

    What is the alternative to our “everyone who wants to do so can give it a shot” system? Should we further dumb college down to American High School+ levels to boost completion? Should we appoint a committee of experts to decide who should and should not be “allowed” to go on to higher ed? That seems to be what Jessica, epopp, and Fabio are suggesting. Colleges should “have more skin in the game,” don’t currently “have any incentive to do what is best for students in the long run,” and need to distinguish between those “who can graduate…and those who can’t.” The hubris here is, to an outsider, jaw-dropping. I’m sure epopp and Fabio are nice enough people and both seem pretty smart, but I’d like to hear more about the super-powers that enable them to pick winners and losers and to decide what is best for students in the long run.



    May 28, 2014 at 11:11 am

  7. Thanks for the great comment. Two thoughts here. One, for better or worse the “picking winners and losers” is basically what college does. From the moment you are put in front of a classroom you have to decide who is doing well enough to move forward, or get the A, and who is not. I don’t think there’s any way around the fact that whether we’re doing the picking by letting people in or by deciding whether they’re allowed to move forward, we (the collective higher ed “we”) are going to be picking winners. Sure, you can say that if you have the broadest possible access then you are at least giving people a choice. But aren’t we setting students up to fail by saying Yes, give it a try even though you don’t look ready. Then enjoy trying to pay off your $20,000 in debt with your Walmart job when that doesn’t work out.

    Two, I wish we had fully funded public universities, so that there was less of a penalty for trying and not succeeding. But I don’t think we’re going back to a world of fully funded public universities. However, I do think there is still the potential to keep a close-to-free community college option open. That’s why I’m saying, maybe keeping that door open should be the priority — so that people -can- still try without having to take on the kind of debt that makes failure crippling. I just don’t see how welcoming everyone to a university with open arms and then washing our hands of the big chunk who leave us worse off than they came (i.e. indebted and degreeless) is making the world a better place. Is there a different option?



    May 28, 2014 at 11:43 am

  8. @tre: My comments above were in response to Beth’s question, “Assuming that the point of college isn’t just to keep people off the labor market for a few more years, we need ways to offer students support while raising standards.” I think that everyone should have access to higher education, but I also think that we need to consider the quality of that education and what people understand going in. I worry about the financial implications for those who believe that they have to take out significant loans to “give it a whirl,” but I also know that for many people the option that seems feasible is what is close by or convenient and that might not be a high-quality, affordable community college or public school. I meant for my comments to place onus on the institutions to help make college worth it for everyone – and not for the students, their parents, or some committee of experts to decide for whom college is worth it – and also to argue that schools that invest in ensuring student success could reap benefits from the increased costs required to do so. I benefited from institutions that took on some of that responsibility for their students (in-depth college counseling, work-study opportunities matched with student career plans, placement tests and remedial courses to get students up to speed, tenured faculty at community colleges, etc.). I also believe those things make it more possible for students to decide “that they are not cut out for [college] or that it is otherwise not right for them.”



    May 28, 2014 at 12:10 pm

  9. From Tre: “but I’d like to hear more about the super-powers that enable them to pick winners and losers and to decide what is best for students in the long run.”

    Isn’t this pretty much what all undergraduate admissions offices already do?



    May 28, 2014 at 7:57 pm

  10. From Tre: “but I’d like to hear more about the super-powers that enable them to pick winners and losers and to decide what is best for students in the long run.” AND ” Should we appoint a committee of experts to decide who should and should not be “allowed” to go on to higher ed?”

    Echoing JD: “Isn’t this pretty much what all undergraduate admissions offices already do?” and adding: this what we do every time we grade a class and what we do in grad admissions, as well. One of our jobs as teachers is to rank people and say who is better, and the job of admission committees is precisely to say who deserves a chance to try. That’s how the system works. That’s also why those of us who do this job worry so much about the fairest way to do it and the consequences of the difference approaches to what we do.



    May 28, 2014 at 9:37 pm

  11. I’m afraid that you are missing my point. Yes, professors award grades. Yes, admissions officers craft classes/cohorts. Neither, in the end, has much of anything to do with “deciding” who should or should not go to college. In the U.S., students have effectively unlimited options and anyone who wants to “go to college” (and can afford it and hack it) can do so. And they can do so even if they wouldn’t do well in your class or be admitted to your university.

    I thought we were talking about “is college worth it” and my question was, “what is the alternative to our ‘everyone who wants to do so can give it a shot’ system?” As I mentioned in my original comment, I’m suspicious of advice offered by critics who themselves would never think of discouraging their own children from going to to college.



    May 28, 2014 at 11:15 pm

  12. @tre: Fair enough. I don’t pretend to have all the answers here. My main concern is that because of increases in both noncompletion and loan amounts, there are a growing number of people who will start college, not finish, and end up in a worse place than had they never gone at all. My second concern is that the things we are doing to fix that problem are going to “solve” the problem by further watering down college.

    Also, I just finished Paying for the Party since writing this post — wonderful book, and some really good examples of how going to college can sometimes make people worse off.



    May 29, 2014 at 6:39 pm

  13. epopp, my reading of PftP was that the kids who were worse off was not because they were not college material but because of the organizational practices of the large, state flagship university, such as giving the upper-middle-class dominated Greek system free reign over the campus’s social life, BS occupational majors that help only upper-middle-class kids because they have the connections to go far in those fields, and limited exits/ramps onto useful, academically intensive/and/or vocational courses of study. The authors argue that the kids who did not fare well at the university might have done better at satellite commuter campuses with no party culture, or possibly even the private colleges with a more academic focus. So I don’t think that watering down college is the only fix on the table, but looking at how colleges serve the needs of working-class kids.



    May 29, 2014 at 9:22 pm

  14. My reading of PftP is also closer to joshtk76’s. The book reports that students who dropped out of MU and transferred to regional public campuses actually had BETTER completion rates than those who stayed at MU. The reasons stated in the book were 1) better cultural fit with fellow students who were also struggling financially and 2) more smaller classes and more supportive teachers who helped students overcome educational disadvantages.



    May 30, 2014 at 3:52 am

  15. joshtk76, OW, you are right that the unsuccessful students in PftP weren’t unsuccessful b/c they were dropping out with lots of debt, which is what I was talking about earlier, and that the ones who transferred to regional campuses did better. And I totally agree that a focus on meeting the needs of working-class kids is critical. But PftP does show, in painful detail, that college — as it presently exists — isn’t a panacea.

    Re the watering down, some of what I have in mind are changes in CT and FL, for example, that limit remedial education at the college level. The idea is that you just put people in regular classes and offer support (with, I guess, all the massive resources community colleges have sitting around). This has the potential to be a disservice both to the people who need the extra preparation and the people who don’t:
    (sorry, links may be gated)



    May 30, 2014 at 12:47 pm

  16. epopp: So I guess we are not that far apart, because working class students who did NOT transfer to regional campuses DID have high drop out rates. Or if they didn’t transfer, they were in junk majors with no career arc. And money was an issue. Interestingly, in PftP the big money problem wasn’t the tuition, but the expensive social life dominated by rich kids. Part of the reason students did better at regional campuses is that they could have friends and a social life without going into extra debt for it. I don’t think most discussions of the financial parts of college have attended to that part of the problem.



    May 30, 2014 at 2:14 pm

  17. PftP might be worth a post of its own — fascinating book and its implications are provocative, but MU is a very particular place — would be interesting to think about how general the findings are likely to be and how to test them elsewhere.



    May 30, 2014 at 6:55 pm

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