Cost of Education, Domestic, Education Quality, Gainful Employment, Minorities, equity, and access, Opinion, Private education, Public education, Required, Student Loans, Students, Unemployment, University & College - Written by Wired Academic on Friday, October 28, 2011 7:54 - 0 Comments
Is College Worth The Price? Intelligence Squared Debate Divided By Knowledge @Wharton
A blog from one of the nation’s top business schools examines the ongoing debate of whether a college degree is worth the money and time. The University of Pennsylvania Wharton School of Business and its Knowledge @Wharton blog examine a recent Intelligence Squared debate that pitted Paypal Co-founder Peter Thiel and social scientist Charles Murray against entrepreneur Vivek Wadwha and Northwestern University’s Henry Bienen. As a backdrop, tuition and fees at U.S. colleges and universities climbed 439% in current (unadjusted for inflation) dollars from 1982 to 2007, according to a 2008 report from the National Center for Public Policy and Higher Education in San Jose, Calif. That topped the 251% rise in U.S. health care costs over the same stretch, and was nearly three times higher than the growth of median family income. Knowledge writes:
The value of a college education is under attack. While more U.S. students are enrolled than ever before, a perfect storm of soaring costs, rising student debt and shrinking job prospects have led critics to increasingly challenge whether college remains a worthwhile investment.
Among those leading the attack is PayPal co-founder Peter Thiel, who charges that higher education has become a dangerous bubble. Thiel, whose own credentials include bachelor’s and law degrees from Stanford University, has put his money where his mouth is by awarding $100,000 two-year fellowships to 20 promising teenage entrepreneurs to develop their business ideas instead of attending college. Like other bubbles, college is “characterized by runaway costs where people are paying more and more for something whose quality hasn’t gone up,” Thiel argued during an October 12 debate in Chicago sponsored by the website Intelligence Squared U.S.
College advocates counter that higher education has never been more vital as employers demand the advanced schooling and training that are required of workers in a global, technologically oriented economy. “China and India are educating,” says Vivek Wadhwa, who holds research positions at Duke University, Harvard Law School and the University of California at Berkeley. “If we’re going to dumb down America at the same time the world is getting smarter, we’ll become a Third World country,” notes Wadhwa, founder of two software companies.
Few people dispute the economic value of at least some post-high school education, since incomes can rise sharply with further schooling. At issue is who is best served by a four-year college experience and what the viable alternatives should be. “There isn’t one way to the finish line,” according to Wharton marketing professor Eric Bradlow. “The educational system should provide a broad set of opportunities.”
Bleak Job Picture
Debt-burdened graduates face the toughest job market in years. Data collected by the Center for Labor Market Studies at Northeastern University show a drop in the share of graduates under the age of 25 who have jobs from 81% in 2000 to 74.4% in the period from October 2010 to March 2011. The share of recent graduates with jobs that require a college degree fell farther, from 59.7% in 2000 to 45.9%, indicating that some graduates have resorted to positions like waiting on tables or parking cars.
Meanwhile, automation and the transfer of U.S. jobs to other countries are reshaping workplace demand. Microsoft Excel software now performs tasks that once required in-house computer programmers, notes Wharton management professor Peter Cappelli, and computer technology has made it easier to move white-collar jobs offshore. Radiologists in Bangalore, India, routinely read U.S. hospital x-rays, he adds, while workers in the Philippines handle U.S. back-office banking chores.
The good news for college students is that incomes tend to rise along with education. “The empirical evidence on this is very clear,” says Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce. “A bachelor’s degree is now worth about $1.2 million more than a high school diploma” in average lifetime earnings, he notes, while virtually any post-secondary education can boost income. A two-year associate of arts degree is worth about $425,000 more than a high-school diploma, for example, and college dropouts can still earn more than $240,000 more than students who stop at high school.
The post lays out more research, issues and views in the debate. But it ends with an optimistic note about college.
The View Ahead
The stormy debate over whether college is a good investment is unlikely to blow over anytime soon. Agreement is elusive on whether schools are producing enough graduates with associate and bachelor’s degree to meet future occupational needs. While the Georgetown Center on Education and the Workforce says that the United States will fall short by three million graduates by 2018, other researchers dispute the methodology behind this projection and see no shortage ahead. But few doubt that some type of post-secondary education is vital in today’s economy. “It’s our obligation to see that there’s a path for everyone,” says Laura Perna, a professor at the University of Pennsylvania’s Graduate School of Education. “All the different pathways are really preparations for meaningful work.”
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