Is Going Back to School Worth It in a Difficult Job Market?
The pandemic reshaped the entire concept of higher education in America while doing precisely the same thing to the job market waiting for graduates on the other side. The debate over the necessity of college was nothing new moving into 2020, but when the virus closed campuses, forced virtually all instruction online and exacerbated the burden of student debt, America was once again asking if college was worth the effort and expense.
Publications like The Hill were quick to report that even in the pandemic’s worst throes, it appeared that college students continued to have faith that the benefits of higher education did, in fact, justify the hefty investment of time and money that college requires.
College certainly isn’t for everyone. Here’s what you need to consider if you’re thinking of investing in higher education as a recent high school grad, an adult hoping to advance/change careers or someone who is out of work and looking for a fresh start.
Degrees Are Pricey, but They Buy Security in Times of Crisis
According to the College Board, a four-year degree will run you between $107,280 and $219,520, depending on whether you go to a private or public school. Even after scholarships, grants and other awards, nearly 165 million Americans had to borrow a record $1.4 trillion to pay for it all. That’s a record $36,635 in student debt each, according to Experian and EducationData.org.
Frightening numbers, indeed, but the potential ROI of money spent on higher education has never been clearer than it was during the pandemic. The virus’ economic wrath was cruelest to the country’s least-educated populations and most merciful to those with college degrees. Consider the following:
- With a jobless rate of 7.2%, non-high school graduates were already most likely to be unemployed in February 2020, according to Pew Research Center. By May, that number had soared to 18.5%.
- Roughly 4.1% of high school grads were unemployed in February 2020, 15% in May.
- Only 3.3% of those with some college were unemployed in February, 12.9% in May.
- Just 1.9% of people with bachelor’s degrees were unemployed in February, rising to 7.2% in May.
The trend was not an anomaly unique to the pandemic; a nearly identical pattern emerged early on in the Great Recession, as well.
Recent Grads Should Know That Education Pays
A college degree is by no means a guaranteed ticket to a secure and lucrative career. However, the most recent data from the Bureau of Labor Statistics (BLS) makes it impossible to ignore the link between higher education and higher pay. The median weekly earnings, according to education level for full-time workers over the age of 25, are:
- No high school diploma: $619
- High school diploma: $781
- Some college, no degree: $877
- Associate’s degree: $938
- Bachelor’s degree: $1,305
- Master’s degree: $1,545
- Doctoral degree: $1,885
- Professional degree: $1,893
According to a study from the Georgetown University Center on Education and the Workforce, you could get two out of three jobs with a high school diploma or less before the 1980s. Those days are long gone, however, and the door to the middle class is quickly closing on uneducated, unskilled workers.
Successful Students: Where 51 CEOs Went to College
Alternate Paths: 15 Rich Influencers Who Didn’t Need a College Degree
It Also Provides Armor Against Unemployment
Georgetown estimates that by 2027, 70% of all jobs will require at least some college. That means those without degrees are competing for a dwindling number of low-paying positions. The result is that just as income rises dramatically with each degree level, so does unemployment. The jobless rate by education level, according to recently updated data from the BLS, is:
- No high school diploma: 11.7%
- High school diploma: 9%
- Some college, no degree: 8.3%
- Associate’s degree: 7.1%
- Bachelor’s degree: 5.5%
- Master’s degree: 4.1%
- Doctoral degree: 3.1%
- Professional degree: 2.5%
Mid-Career Adults Should Make Degree-Specific Choices
Recent high school grads aren’t the only ones weighing the pros and cons of higher education as the pandemic passes. Plenty of working adults are hoping a degree could help them change careers or advance in their same field. In terms of pay and job security, more education is generally better, but this category of learners would be wise to concentrate their risk-reward analysis solely on their specific degree and major.
For example, the Georgetown study revealed that the average person with a bachelor’s degree in architecture and engineering earns $39,000 more per year than the average person with a bachelor’s degree in education. In fact, the architecture/engineering undergrad makes $24,000 more than even someone with a master’s degree in education.
The study also revealed big variations within individual majors. When considering your new career, make sure to get granular in terms of your course of study. The top 25% of education degrees, for example, earn nearly as much as the bottom 25% of architecture and engineering degrees. The same holds true for degree levels. A blue-collar trades certificate, for example, earns almost as much as a bachelor’s degree in education, psychology or social work, which earns less than a STEM certificate. A two-year associate’s degree in STEM earns more than a four-year degree in liberal arts.
Current Job Hunters Can Dive Right Into Work — Degree or No Degree
If you’re out of work and looking for a job, you don’t need to go to college to earn a living — at least not in today’s climate. The Wall Street Journal is just one of many publications that have been reporting on the tightest job market in recent memory. With summer halfway over, it’s still an applicant’s market — prospective hires have their choice of companies that are desperate for talent.
Those companies are suffering from the same labor drought all over the country. Forced to draw from the same shallow pool of prospective employees, they’re raising wages, increasing their benefits programs and offering hefty signing bonuses. Many of those businesses are restaurants, retail chains, supermarkets and other industries where unskilled, entry-level workers without college degrees can now realistically expect to earn double the minimum wage — or close to it — with generous benefits packages, to boot.
More From GOBankingRates
- Follow Along With 31 Days of Living Richer
- Read About the Best Small Businesses in Your State
- What It Means To Live a Truly Rich Life and How To Achieve It
- Big Personal Goals That You Should Put Your Money Toward
Last updated: July 21, 2021