Americans Are Questioning the Value of Higher Education

Part 1 of 3: Disturbing Evidence

Photo by MD Duran on Unsplash

American attainment of higher education is declining relative to other developed countries even though higher education contributes to a better economy, better social outcomes, and higher salaries for graduates. It is a curious phenomenon that appears to be mainly an American perspective change. What is going on here?

Below is Part 1 of 3, where we’ll look first at some disquieting data. In Part 2, we’ll explore the surprising underlying factors, and in Part 3 we’ll consider possible solutions and what it means to you.

The Data

Many studies have uncovered a decline in college enrollments over the last few years. For example, a report published in March 2023 by the National Student Clearinghouse Research Center shows enrollment declines across all institutional sectors. As shown in the graphic below, while private 4-year institutions have seen some slight increases, the overall trend is quite negative.

Globally, the United States is currently one of the most educated countries in the world. As one indicator, we can consider the tertiary educational attainment of various countries, where tertiary education refers roughly to post-secondary or some form of college-level education—from professional degrees and associate degrees up to doctorates. The chart below, created by by wisevoter.com using data from the Organisation for Economic Co-operation and Development (OECD) and The World Bank, shows that the United States has a high level of attainment at about 51%, while many other developed countries including Russia, Japan, and Canada are significantly higher.

Even though the United States remains relatively high now, it is losing ground against other developed countries. The OECD chart below shows tertiary education of 55-64 year olds against 25-34 year olds.

Comparing the two age groups provides insight into the changes over several decades. For example, the tertiary education for the OECD-Average 30 years ago was about 30%, and the average is now around 48%, thus gaining about 16%. By contrast, the U.S. was about third among all the countries 30 years ago, at around 44% tertiary attainment, but only gained roughly 6% in the intervening years, falling to about 14th place in the developed world.

There could be many ways to look at this data. We could question if it has to do with for example the quality of the schools or the types of degrees obtained. Whatever we find, this inquiry is important because education—especially tertiary education—is critical to economic advancement in highly technical, advanced service economies. Data from the OECD 2012 Education at a Glance in fact highlights that a large percentage of GDP is generated by people with tertiary education.

On average, about half of the economic growth is related to labour income growth at the tertiary level of education. In France, Norway, Switzerland and the United Kingdom, 60% or more of growth in gross domestic product (GDP) is generated by those who have attained a tertiary education.

The ROI of Higher Education

Considerable research continues to show that a college education has a positive return on investment (ROI). For example, Jon Marcus, writing for the Hechinginger Report, says:

Workers with bachelor’s degrees earn 67 percent more than people with only high school diplomas, according to the BLS. More than half of “good jobs” — meaning those with salaries of at least $35,000 for workers under age 45 and $45,000 for people between 45 and 64 — call for bachelor’s degrees, the Georgetown University Center on Education and the Workforce estimates.

The Economic Policy Institute found high school graduates made $20.09 per hour on average in 2020; while bachelor’s degree earners made $36.84. Thus, in 2020, receiving a college degree could result in an 83% increase in average wages. And this earning potential only increases over time.

Of note, however, the ROI does depend on the kind of degree you get. The chart below from the Education Data Initiative shows the 20-year and lifetime ROIs of the primary types of degrees. Perhaps surprisingly, an associate’s degree has the best payoff, although all degrees have a positive ROI.

Like a lot of highly averaged data though, these numbers obscure an important fact about getting a return from your higher education: It heavily depends on your chosen field and where that choice takes you in your career. This infographic from Bankrate illustrates the challenge.

Research on the ROI of college degrees thus shows that while the ROI is positive in the aggregate, this is because people with certain degrees do really well, which counterbalances the fact that other degrees are actually net losers.

For more comprehensive lists, see these studies:

• Is College Worth It: A Comprehensive Return on Investment Analysis

• What is the ROI of Your College Degree

• Does the college itself matter? Perhaps in this Georgetown University report.

Finally, it is worth considering that the value of college is not just in making more money. For example, some studies have shown that more educated people are just happier.

In a survey that utilized data from the U.S. General Social Surveys, 94% of people with a bachelor’s degree or more reported feeling happy or very happy with their lives overall, while 89% of high school grads said the same.

The Perceptions

The shocking aspect then is that despite the generally positive ROI of a college education, public perception of its value is declining rather steeply. For example, a March 2023 Wall Street Journal-NORC poll found that at this point, less than half of Americans think college is worth the cost.

The survey, conducted with NORC at the University of Chicago, a nonpartisan research organization, found that 56% of Americans think earning a four-year degree is a bad bet compared with 42% who retain faith in the credential. 

The table below gives the general breakdown over the last six years and shows that the perception has changed significantly, going from 40% thinking it’s not worth it to 56%

These perceptions vary somewhat across gender and age groups, but the overall theme is the same: Most groups show some decline in perception of the value of college and no group has increased their perception.

Conclusion

In a world of heightening competition, where numerous countries are becoming technologically advanced and continued economic development depends on education, a majority of Americans have curiously decided that education is not worth it. This has alarming implications for American leadership on the world stage and correspondingly for the continued high standard of living and future well-being we all expect to enjoy.

Why is this happening? Is it justified? In Part 2, we’ll discover some interesting and surprising factors behind this perception change. In Part 3, we’ll discuss solutions and actions that citizens can take.