Higher Education and the Job Market – Myths & Truths When it comes to traditional thinking about the value of a college education, mythology increasingly overwhelms the truth. The prevailing mindset is that investment in a college education will prepare students for a future that provides greater economic opportunity and job security and thus, an ROI that will outweigh the costs. It’s a romantic notion that is perpetuated ad infinitum and it’s generally not true in today’s world. Let’s take a look at some hard facts that will expose the oft-peddled illusions and help reveal the truth. The Truth – College is a Very Risky Investment Fact – More and more students are returning home to live with their parents after college due to the massive debt and the lack of meaningful job prospects. The following data is staggering and should raise a red flag when evaluating the costs/benefits of a college education. According to the College Board, “moderate” 4-year costs average $179,000 for a private college and roughly $92,000 for an in-state public college. This is the net result of a disturbing trend in which average published tuition and fees at private, nonprofit four-year colleges and universities increased 14% beyond the rate of inflation between 2008-09 and 2013-14. During this same period, students took on more and more debt – about 18% of the total cost of college (based on 2012-13 academic year data from Sallie Mae), which is likewise up 14% from 2008-09. According to the Department of Education, this burden has become so onerous that one in ten students defaulted on those loans in the first year! In fact, student debt has grown by more than 50% in the last decade and by 500% since 1999! And what does the student debt situation look like for those trendy for-profit universities that are designed to help graduates? Here’s one example – According to the July 7, 2014 edition of the San Francisco Chronicle, “More than a quarter of University of Phoenix students default on their loans within three years of leaving school…” OK, so the student debt situation is gruesome and getting worse. What about the parents who have saved their hard-earned money to send their kids to college in the hopes of preparing them for professional and ideally, high-paying careers after graduation? Their plight is also alarming. In this economy, the truths for parents are quite sobering – an increasing percentage has been forced to eat into their savings just to pay bills, their job opportunities are way down due to a shifting market and rampant ageism, and healthcare costs for their kids, their elderly parents and themselves are way up. And dare we mention the housing market? When you add it all up, most parents are no longer in a position to pay for their children's college education without encountering significant risks of depleting their savings and living in tough economic circumstances. Times sure have changed. Let’s look at the data. A recent report from Accenture states that over one third of the recent college graduates were earning less than $25,000 per year and over 40% had returned home to live with their parents. Why is this so? The truth is that many students graduate from college without specific job skills, so they aren’t really qualified for any particular job. Thus, when they attempt to navigate the labyrinthine maze that is today’s job market, they are often dazed and confused and end up with a minimum-wage job flipping burgers or enduring some other form of underemployment. This is a sad fact, considering the time investment of four years or more attending college, and the financial investment of tens or even hundreds of thousands of dollars. Clearly, not a desirable return on an investment. Affordable Education that Leads to Real Jobs Remember how we bemoaned the outsourcing or “offshoring” of so many American jobs to countries that possessed cheap labor. Well, that tide is turning in a big way, especially in the manufacturing sector. According to the 2011 Skills Gap Survey by the Manufacturing Institute, about 600,000 manufacturing jobs are unfilled nationally because employers can't find qualified workers. In an odd twist, we now have a situation in which the need for skilled labor is steadily growing, yet the current generation has practically no trade skills. In fact, those who possess multiple trade skills are in demand and their wages are rising. The opportunities are abundant and waiting. “Young Americans who don't have college credentials but do have valuable skills are doing very well—for example, those who have learned welding or other trades. Many young people with B.A. degrees are heading toward community colleges and trade schools where they can acquire valuable skills. Most college programs are neither necessary nor sufficient for that.” The bottom line is that there is a glut of manufacturing jobs open right now and there are numerous educational outlets that deliver the necessary training to succeed in these jobs. Some, like ATTI or Accelerated Technical Training Institute (http://www.instanttradeskills.com), offer a Certified Multi-Trade Technician (CMTT) home study course in which a committed student can learn the necessary tech trade skills in just nine months, leading to real professional employment opportunities and way-above-average income. And the cost? Only a small fraction of the expense of attending a four-year college. In other words, you can spend a fortune and many years following the long-held dream of what a traditional college can deliver, incur massive debt and hope for a meaningful job at the end of the rainbow or you can save the lion’s share of that money and the attendant debt and pursue a quick and focused path to a lucrative career in the trades, if that route resonates with you. It might be worth a look. “As millions of young Americans struggle to land jobs, students in manufacturing trade schools are sitting in a sweet spot. They're being hired even before they graduate.” – Parija Kavilanz, (from Nine Months in Trade School. Job Guaranteed) CNNMoney, July 23, 2012 |
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