The Value of a College Education

 

One of the occupational hazards and/or perks of working in higher education: I know a lot of economists.  By and large, from Nobel Laureates to consultants to the Federal Reserve, they strike me as thoughtful, contemplative individuals, and I’ve learned I can count on them for fascinating (although often conflicting) explanations of everything from unemployment rates to the international debt crisis.

Despite all of that talent and brilliance, I seem to have a fundamental disconnect with them when we discuss higher education.  Over and over again, from recent articles in the New York Times to the Wall Street Journal and all over the Huffington Post, I read explanations about how to calculate the value of a college degree.  I find it strange that many of the economists that I find so thoughtful on other matters of monetary policy reduce this issue to a fairly simple equation – how much will a student and his or her family spend, compared to how much more that student is likely to earn over his or her lifetime with a college degree?

Maybe it’s because most of the authors are in midst of paying their kids’ college tuition.

 

While I think these formulas have their place, especially when we are discussing levels that state or federal governments should be investing in higher education, they fall far short on estimating what college is worth.

Here’s a radical idea I don’t often see discussed in the media: the experience you have BEFORE you graduate has as much to do with the value of your degree as the job it helps you get AFTER you graduate.

What happens before you graduate?  You..wait for it…go to college.  Going to college is awesome.  It is, one might argue, even more awesome at some places than others, and some of those places are more awesome for YOU than for some other less awesome students.

Perhaps you strive to make a difference in the world, and have the talent and drive to be in a community of elite scholars that hold similar values (shameless plug – if that’s you, go ahead and visit Brandeis).   Others of you may enjoy shouting with tens of thousands of your closest friends for your fellow students (and by fellow students, I mean unpaid professional athletes whom you will rarely meet but are wearing jerseys the same color as the paint on your face) as they seek to coordinate movement of some spherical object past a group of truly awful individuals (and by awful, I mean unpaid professional athletes wearing jerseys failing to match your face paint).  Either or both may be communities that engage you, and in which you feel comfortable.

In other words, for many students selecting college is about more than a credential that will unlock future income – it’s also about joining a community.  It is very likely, depending on your college, that you will build a lifelong network of individuals who will be your peers, colleagues, business partners, and best friends…maybe even a spouse (or two).

Your community is not just the people you associate with in the future, it’s also the range of experiences you have with them.  We talk about how homes hold (or, more recently , lose) their value, but most of us want to like the place we live.  The value of a home to us is more than its sale price – it’s your neighbors, what’s available in the area, and how it fits your lifestyle.  The value of your home, just like your college experience, has a lot to do with the community you want to join.

That being said, I do believe college remains a really solid investment, within reason.  There are, unfortunately, more and more stories of students who find themselves loaded down with enough debt to finance a small mansion in most Midwestern towns.  Let’s be clear – if you are taking on debt better suited to a small nation-state, you may want to rethink your life strategy.

Assuming that you are incurring no more than reasonable amounts of debt, however, it seems odd to think of your college decision based solely on some assumed return on investment.  More likely, you will spend a considerable amount of time screening our carefully constructed admissions propaganda to determine the communities that are the best fits for you.  My advice?  You just shouldn’t settle for anything less than awesome.  Be seeing you.

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One Response to “The Value of a College Education”

  1. Great post. It is critically important to remember the WHOLE value of your college education.

    That being said, I rarely talk to students that are not taking into account the social and “extracurricular” aspects of the colleges they are considering. ( that was in quotes because I really mean parties )

    The key is balance. If you are evaluating your college investment like you would a four to five year summer camp, you will not make the right decision. And, like Dr. Flagel says, if you are only calculating the hard ROI of post college compensation, you are missing the forest for the…. parties, all night political debates, rugby pick up games in the quad, cold pizza breakfasts and all the other experiences you will never have without college.

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