Dig Baton Rouge

The Costs of Failing College

By NICK BEJEAUX
News Editor

Stressed about passing finals this week? You should be.

According to a recent study from the Pew Research Center, the difference between pass and fail could be worth hundreds of thousands of dollars in future earnings.

The study, titled “The Rising Cost of Not Going to College,” looked at the earnings of a group of millennials (ages 25-32) with varying levels of education – about 2,000 individuals. The PRC found that graduates with a Bachelor’s degree or more earn, on average, $45,000 annually compared to the $28,000 earned by the holder of a high school diploma. Over a 45-year working career, that degree could spell an additional $765,000 in earnings for those who walk on Graduation Day versus those who never make it there.

“We just have way too much education…There are way too many people going to school.”

“The disparity in economic outcomes between college graduates and those with a high school diploma or less formal schooling” – 83 percent, to be exact – “has never been greater in the modern era,” the study read.

As the benefits of education continue to rise, however, so do the costs and risks. The average student loan debt is $22,789 in Louisiana, according to The Institute for College Access and Success. Meanwhile, Louisiana’s average graduation rate, spread out over its four state systems, is 38 percent, which means well over half of students are dropping out of school. Reasons for dropping out vary, but the common reality for each individual is that they still have student loans to pay and much less likely than a graduate to have an income that will pay them off.

In fact, Louisiana currently ranks 49th in the U.S. in the number of college graduates as a percentage of population. Less than three out of every 10 Louisianans holds a two or four year degree, according to a report released last week by the Lumina Foundation.

That may not be the worst news, if you ask economist and George Mason University Professor Bryan Caplan, wh  is writing a book on this phenomenon titled The Case Against Education. During an interview with the EconTalk podcast, Caplan said he will argue in the book that education, as is, has gotten too big to effective.

“The biggest policy implication that’s going to come out of my book is we just have way too much education,” he said. “I call this the white elephant in the room. There are way too many people going to school, maybe not from their own selfish point of view, but certainly from a social point of view to go and pour more money on this really is just throwing gasoline on the fire. And we need to do less of it.”

Caplan asserts that education has been “subsidized beyond the point of offering returns.” In other words, degrees have become far too available to represent anything valuable.

Caplan’s views aren’t quite mainstream. Many in the education industry are pushing higher rates of degree attainment. The Lumina Foundation’s goal, dubbed Goal 2025, is for a national 60 percent attainment, more than double Louisiana’s current figure, by 2025.

“We remain convinced — are more certain than ever, in fact — that significantly increasing college attainment is the key to ensuring a bright future for our nation and its citizens,” said Lumina President and CEO Jamie P. Merisotis.

Louisiana’s top higher education advisor Tim Layzell is looking at a more conservative figure: 42 percent. He told the Senate Finance Committee earlier this month that small steps are critical.

“You have to start with a goal. If you don’t focus, you’ll lurch from year to year,” Layzell said. “You could see improvement and get closer to your goal just by natural progression, but you’ll get there faster with a goal.”

The reality of higher education today is that having a degree pays, but not everyone has what it takes to get a degree, or rather the right degree that will pay for itself.

But to those who do have what it takes, the payoff is clear.

“The importance of increasing educational attainment can’t be overstated,” Layzell said.

Pros and Cons

Should you finish school? Should you even start it? Here’s a quick list of the pros and cons of getting your degree.

Pros

  • Higher Earnings: College graduates earn 83% more on average than high school grads. You don’t need a diploma to know that’s a lot of dough.
  • The Experience: Four years on campus – okay, let’s be honest, five, you slacker – yields a lifetime of memories
  • Cheap Tickets: Why pay full price for Tiger Stadium seats when you can get the student discount?

Cons

  • Debt Burden: Louisiana’s students owe more than $20,000 by the time their done. You better like Ramen noodles.
  • Bubble Bursting: As more and more students get degrees, the intrinsic value of each degree decreases. You may be better off in job training, something Louisiana is increasing investment in.
  • Junk Mail: College grads get bombarded by their alumni associations for donations. Ain’t nobody got time for dat!

 

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