Myths, Facts, and the Qualified Case for College

Essay by J.H. Cullum Clark, Director of the Bush Institute-SMU Economic Growth Initiative

The case for earning a postsecondary degree is as strong as ever for most young people – and so is the case for renewing America’s commitment to expanding college access. Reaching higher college attainment levels requires dismantling barriers to opportunity and transforming America’s higher education sector.

Students graduate during a UCLA ceremony. (Shutterstock)

Like the film “Four Weddings and a Funeral,” today’s narratives on higher education contain both happy and unhappy elements, five of which can be summarized as “four myths and a truth.”

Myth number one is that most students in four-year institutions major in esoteric fields that do little to enhance their career prospects. The truth: More than 60% of 2021 four-year college graduates majored in STEM, business, or other technical fields associated with in-demand, high-paying jobs, based on Bush Institute analysis of U.S. Department of Education statistics.

Just under 10% majored in “teach and protect” fields like education and military science that don’t pay well but society needs. The remaining 30% chose proverbial arts and humanities fields like philosophy or Russian literature.

The share of students in the first category has grown steadily over the past four decades, while the latter two are declining. The college wage premium – additional income earned by people with a bachelor’s degree as a percentage of average earnings for people with only a high school diploma – generally exceeds 125% for the first group but is below 40% for the latter two groups, according to Federal Reserve Bank of Cleveland research.

A second myth is that large and growing proportions of graduates are stuck in low-paying jobs that don’t require a bachelor’s degree. In actuality the share of graduates who fit this description has held steady at 10% to 15% for many decades, based on Bureau of Labor Statistics data.

Myth number three is that the college premium is primarily due to the “signaling” effect people convey to employers by getting accepted and graduating from college, rather than what they learn while enrolled. The truth: Approximately two thirds of the college premium reflects skills learned or enhanced in college, according to research by University of Pennsylvania economist Hanming Fang.

A fourth myth is that a large share of students could attain the same wages through industry-recognized certifications (IRCs) that can be earned in a year or less or apprenticeships rather than bachelor’s or two-year associate degree programs.

A 2022 University of Texas at Austin study of young Texas workers found that certain in-demand IRCs deliver a 10% to 15% premium over the average high school graduate’s wages, while most IRCs bring no wage benefit in the absence of a postsecondary degree. Most occupations requiring only an IRC are likely to grow more slowly than the economy as a whole, a Brookings Institution study predicts.

High-quality workplace apprenticeship programs, meanwhile, can generate significant earnings benefits, but German-style apprenticeships have never taken off in the United States because employers can’t justify the investment when employees switch jobs as often as they do. Only about 2% of Americans participate in an apprenticeship by age 24, primarily in the construction sector.

But contemporary narratives on higher education contain one important truth: More and more people are joining living-wage, upwardly mobile occupations based on two-year associate degrees from community colleges. The number of such workers has grown more than 80% since 1991. Worker shortages in these fields are generating growing wage premiums.

As for the higher education sector itself, America’s colleges and universities are in about the fourth or fifth inning of a long evolution.

College skeptics persuasively argue that more people should go into relatively high-paying skilled trades. But a community college degree is the main pathway to these occupations. Almost half of HVAC technicians and more than 60% of electrician technicians have associate degrees, employment firm Zippia reports.

University of Pennsylvania (f11photo/Shutterstock)

Like the film “Four Weddings and a Funeral,” today’s narratives on higher education contain both happy and unhappy elements, five of which can be summarized as “four myths and a truth.

The benefits of a college education

Contrary to the narrative presented by college skeptics, today’s young workers continue to enjoy the earnings benefits of college degrees. Bachelor’s graduates between age 22 and 27 earn approximately 70% more than peers who stopped out after high school, according to a 2022 Pew Research study. And the premium grows as they gain workplace experience.

The benefits of college degrees go beyond earnings, of course. Bachelor’s graduates have better health outcomes and invest more in educational activities for their children than peers with lower education levels even after holding incomes constant, according to a 2019 College Board study.

And the benefits extend to others. People with lower education levels earn more in metropolitan areas with high population shares holding a bachelor’s degree or higher, since high education levels make these places exceptionally productive places for everyone. Black, Hispanic, and foreign-born people all earn more in these metros than peers elsewhere, based on George W. Bush Institute analysis of Census Bureau data.

Places with high college-educated population shares also enjoy higher civic engagement, democratic attitudes, and trust among residents, strengthening local institutions to everyone’s benefit.

These facts make a strong, though qualified, economic case for college. Benefits easily exceed costs – provided students learn useful, in-demand skills, preferably in programs associated with well-defined career pathways.

Barriers to opportunity

Just over half of new high school graduates enter four-year colleges today, while about one in five enter community colleges. But these figures miss disturbing realities of America’s school-to-workplace pipeline.

Only 30% of young people from families earning less than $50,000 enroll in four-year institutions, compared with 80% of those from families earning more than $100,000. Just 70% of students attending four-year colleges – and only half of those from low-income families – graduate within six years.

Two students building a machine during engineering class. (Shutterstock)

At two-year colleges, most never earn a degree or credential, according to Brookings. For community college students from families in the lowest-income fifth of the population, the completion rate is just 9%.

Studies point to numerous barriers standing in the way of college enrollment and completion for many low-to-moderate income students:

  • Information: Many high schoolers have inadequate information on available opportunities and pathways for accessing them. College students often face too many choices with too little advice and insufficient clarity regarding career paths.
  • Physical access: Most low-income students travel less than 70 miles from home for college, which means people without nearby options are less likely to enroll and persist.
  • Money: Despite America’s generous financial aid programs, the top reasons young people give for not enrolling are that they can’t afford it and that they must work.
  • Academic readiness: Precipitous drops in national test scores during the pandemic point to growing readiness challenges.
  • Content usefulness: Most younger college graduates say college didn’t provide them useful skills for the workplace, suggesting a growing disconnect between academic programs and workplace needs.
  • Poor job opportunities where students live: The college premium is below 40% in many low-opportunity metros, compared with 140% or more in several opportunity-rich areas.

Renewal and transformation are needed

21st century America needs a higher education sector prepared to offer a fast-changing, kaleidoscopic range of programs that are responsive to labor markets, informed by data, stackable and transferable across institutions, and focused on preparing students of all backgrounds and life stages for a vast array of evolving occupations. Colleges and universities need to expand physical access through new physical sites near underserved populations and slash costs through high-quality hybrid delivery models. And they need to step up advising and other activities to help disadvantaged students get to the finish line, as many Historically Black Colleges and Universities successfully do.

Federal and state policymakers should publish nationally consistent data on occupational pathways; fund better information tools, counseling resources, and career-connected learning programs for high schoolers; create funding streams for colleges and universities to develop streamlined career pathways; link student lending policies to choice of major; and promote alternative accreditation systems to invite disruptive innovators into the postsecondary ecosystem.

The private sector also has a role to play. Employers can contribute to upward mobility by partnering more closely with education providers to develop relevant academic programming and expanding paid internships and other on-the-job learning opportunities. Philanthropists can help fill financing gaps and scale up proven workplace-readiness programs like Year Up.

As for the higher education sector itself, America’s colleges and universities are in about the fourth or fifth inning of a long evolution. They are evolving away from their origins as elite institutions preparing small, homogeneous student bodies for a handful of occupations and towards a future as nimble, innovative engines of talent development and upward mobility for a diverse society of lifelong learners.

These facts make a strong, though qualified, economic case for college. Benefits easily exceed costs – provided students learn useful, in-demand skills, preferably in programs associated with well-defined career pathways.

Distinctions between two- and four-year institutions are likely to blur as each launches more market-responsive degree programs and IRCs. Market forces will reward successful innovation and sort out the place of arts and humanities programs. And markets, if sufficiently unleashed, will determine the fates of institutions that enforce ideological conformity and those that rededicate themselves to free inquiry.

From the land-grant university system initiated under Abraham Lincoln to the GI Bill and the Pell Grant program, expanding college access has been a cornerstone of American public policy and a towering success. America should double down on this longtime commitment because college – even as it evolves – remains an excellent bet.

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