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Federal Reserve Warns That "College May Not Pay Off for Everyone"

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'College May Not Pay Off for Everyone

Jaison R. Abel and Richard Deitz

In our recent Current Issues article and blog post on the value of a college degree, we showed that the economic benefits of a bachelor’s degree still far outweigh the costs. However, this does not mean that college is a good investment for everyone. Our work, like the work of many others who come to a similar conclusion, is based in large part on the empirical observation that the average wages of college graduates are significantly higher than the average wages of those with only a high school diploma. However, not all college students come from Lake Wobegon, where “all of the children are above average.” In this post, we show that a good number of college graduates earn wages that are not materially different from those of the typical worker with just a high school diploma. This suggests that, at least from an economic perspective, college may not pay off for a significant number of people.'


6a01348793456c970c01b7c6d45dc1970b-800wi


http://libertystreeteconomics.typepad.com/.a/6a01348793456c970c01b7c6d45dc1970b-800wi


So, according to the above, if you're in the bottom 25 percentile of college students, financially speaking, college will do you more harm then good (virtually the same income plus college costs/debt).
 
I agree.

My Sister in Law for example, went to College and indebted herself to the tune of nearly 80 thousand dollars so she could walk out of their with a uselss Liberal Arts degree.

She's unemployable ( well maybe she could be a barrista ) and she wasted 4 years of her life
 
'College May Not Pay Off for Everyone

Jaison R. Abel and Richard Deitz

In our recent Current Issues article and blog post on the value of a college degree, we showed that the economic benefits of a bachelor’s degree still far outweigh the costs. However, this does not mean that college is a good investment for everyone. Our work, like the work of many others who come to a similar conclusion, is based in large part on the empirical observation that the average wages of college graduates are significantly higher than the average wages of those with only a high school diploma. However, not all college students come from Lake Wobegon, where “all of the children are above average.” In this post, we show that a good number of college graduates earn wages that are not materially different from those of the typical worker with just a high school diploma. This suggests that, at least from an economic perspective, college may not pay off for a significant number of people.'


6a01348793456c970c01b7c6d45dc1970b-800wi


http://libertystreeteconomics.typepad.com/.a/6a01348793456c970c01b7c6d45dc1970b-800wi


So, according to the above, if you're in the bottom 25 percentile of college students, financially speaking, college will do you more harm then good (virtually the same income plus college costs/debt).

So.... can we then assume that the roughly half of students who fail to graduate at all are then left off in a in a similar, or worse situation?
 
the basic stem degrees will still make you a decent living MOST of the time

other degrees will get you jobs in sales, or maybe in your field

spending 80k to get a degree in sociology or history is absolutely freaking nuts

every year, the university of missouri graduates more and more people with journalism degrees

there arent enough jobs in the total field to give people jobs who already had degrees, much less the new graduates

yet....we continue on the merry-go-round

parents need to be more active....and kids need to be aware of what college can and cant do

it may be your dream field.....just be aware that dream could soon be a nightmare
 
'College May Not Pay Off for Everyone

Jaison R. Abel and Richard Deitz

In our recent Current Issues article and blog post on the value of a college degree, we showed that the economic benefits of a bachelor’s degree still far outweigh the costs. However, this does not mean that college is a good investment for everyone. Our work, like the work of many others who come to a similar conclusion, is based in large part on the empirical observation that the average wages of college graduates are significantly higher than the average wages of those with only a high school diploma. However, not all college students come from Lake Wobegon, where “all of the children are above average.” In this post, we show that a good number of college graduates earn wages that are not materially different from those of the typical worker with just a high school diploma. This suggests that, at least from an economic perspective, college may not pay off for a significant number of people.'


6a01348793456c970c01b7c6d45dc1970b-800wi


http://libertystreeteconomics.typepad.com/.a/6a01348793456c970c01b7c6d45dc1970b-800wi


So, according to the above, if you're in the bottom 25 percentile of college students, financially speaking, college will do you more harm then good (virtually the same income plus college costs/debt).

Sorry, forgot to include the link

Liberty Street Economics

Federal Reserve Warns That "College May Not Pay Off for Everyone" | Zero Hedge
 
I don't know where people get the notion that just because they have a college degree that somehow means they will land an awesome job right away. If you get an education in a field with limited to no demand, get ready for a lot of disappointment.
 
I don't know where people get the notion that just because they have a college degree that somehow means they will land an awesome job right away. If you get an education in a field with limited to no demand, get ready for a lot of disappointment.

Massive marketing campaigns on part of universities?
 
College is not about the career of the student, it is a for profit enterprise. The student loan is a revenue stream for somebody else, which is why they are very difficult to dismiss. If you could easily dump them, the risk would be to high and investors wouldn't provide them. Student loans are the next toxic mortgages.
 
Massive marketing campaigns on part of universities?

In addition to simple and subtle indoctrination. I recall as a young lad being told, "do your school work so you get into college or you'll have to be a "labor type guys of the day."

Funny, the few millionaires I know barely made it out of HS.

Problem is simply that most didn't read the fine print. A degree is great, if its the right one. There are plenty of fields where a bachelors can get you started at near 6 figures. Petroleum Engineering comes to mind. Just about anything in science and engineering will get you going in eliminating college debt.
 
College absolutely pays off. It is structured exercise for your mind at a crucial point in brain development.

College is not just job training. We should guarantee access for everyone to maximize our national intellectual resources.
 
'College May Not Pay Off for Everyone

Jaison R. Abel and Richard Deitz

In our recent Current Issues article and blog post on the value of a college degree, we showed that the economic benefits of a bachelor’s degree still far outweigh the costs. However, this does not mean that college is a good investment for everyone. Our work, like the work of many others who come to a similar conclusion, is based in large part on the empirical observation that the average wages of college graduates are significantly higher than the average wages of those with only a high school diploma. However, not all college students come from Lake Wobegon, where “all of the children are above average.” In this post, we show that a good number of college graduates earn wages that are not materially different from those of the typical worker with just a high school diploma. This suggests that, at least from an economic perspective, college may not pay off for a significant number of people.'


6a01348793456c970c01b7c6d45dc1970b-800wi


http://libertystreeteconomics.typepad.com/.a/6a01348793456c970c01b7c6d45dc1970b-800wi


So, according to the above, if you're in the bottom 25 percentile of college students, financially speaking, college will do you more harm then good (virtually the same income plus college costs/debt).

all depends on your major sadly.
 
I agree.

My Sister in Law for example, went to College and indebted herself to the tune of nearly 80 thousand dollars so she could walk out of their with a uselss Liberal Arts degree.

She's unemployable ( well maybe she could be a barrista ) and she wasted 4 years of her life

80K in debt for a liberal arts degree? I only paid 55K for my electrical engineering degree and wasn't in debt at all for it.
 
College is not about the career of the student, it is a for profit enterprise. The student loan is a revenue stream for somebody else, which is why they are very difficult to dismiss. If you could easily dump them, the risk would be to high and investors wouldn't provide them. Student loans are the next toxic mortgages.

I've been saying for 25 years that if you remove the Gov't interference in school loans (Gov't guarantees) altogether, watch college tuitions come falling like rolling rocks. Currently there are somewhere to the tune of 40,000 skilled labor jobs right now in the USA, but no one is taking them? What's wrong with laying bricks, or plumbing, or carpentry? Some tuitions will remain higher BUT only those that really do offer a life after college, like Doctors, Lawyers, engineers etc.. Psychology degree, liberal arts, etc will cost near to nothing to graduate because they are virtually worthless in todays age.


Tim-
 
Just don't get a blow off degree. Do something in computer science or engineering. I have a lot of friends that majored in history and psychology in the hopes that the easy classes would lead to a high GPA and med school. They never got into med school and now are struggling to find work. Always get a degree that matters.
 
Just don't get a blow off degree. Do something in computer science or engineering. I have a lot of friends that majored in history and psychology in the hopes that the easy classes would lead to a high GPA and med school. They never got into med school and now are struggling to find work. Always get a degree that matters.

If my 30 year old self could talk to my 20 year old self I would do everything I could to convince him to take classes more seriously and stick to computer science as a major instead of screwing off and then switching to Political Science (Originally Criminal Justice, but the year I switched my school removed 5 different "focused" degrees into a general "Political Science" degrees).

I absolutely loved the classes I took and thoroughly enjoyed the things I learned, and I do think that the time in those classes helped me better my ability to reason and think, but I would have been much better off going with a computer science degree or simply leaving college.

Getting involved in the actual policy or campaign side of things generally relies more on contacts than it does on your degree. Getting involved with the intelligence community is something that works better with a more focused degree or higher degree. Getting involved in law enforcement on a federal level would depend on what I wanted to do. If I wanted to be a LEO, going into local law enforcement and then moving to federal would've been a better shot. If it was mission support and analysis like I am not, its just getting a foot in the door to the government and then working your way up.

Ultimately, from an actual financial and professional stand point, my degree primarily helped me land my second job in the government and get to my next band about 6 months earlier than I normally would have. The first job with the government was a position that pretty much any person with a high school diploma or even GED could get and they were taking almost all comers. After that point, it's been one of those things that likely had been a necessary "check box" on my resume for each subsequent position but was not a large reason for me getting the job. And the TYPE of support I'd be more interested in in a law enforcement agency would've been aided by the comp sci degree.

The annoyance of hindsight, but it does make me wonder if it's that we need to do a better job counseling kids about the realities of the future in a realistic way...or if the issue is that regardless of such counseling kids just generally won't listen. Probably a mix of the two.
 
If my 30 year old self could talk to my 20 year old self I would do everything I could to convince him to take classes more seriously and stick to computer science as a major instead of screwing off and then switching to Political Science (Originally Criminal Justice, but the year I switched my school removed 5 different "focused" degrees into a general "Political Science" degrees).

I absolutely loved the classes I took and thoroughly enjoyed the things I learned, and I do think that the time in those classes helped me better my ability to reason and think, but I would have been much better off going with a computer science degree or simply leaving college.

Getting involved in the actual policy or campaign side of things generally relies more on contacts than it does on your degree. Getting involved with the intelligence community is something that works better with a more focused degree or higher degree. Getting involved in law enforcement on a federal level would depend on what I wanted to do. If I wanted to be a LEO, going into local law enforcement and then moving to federal would've been a better shot. If it was mission support and analysis like I am not, its just getting a foot in the door to the government and then working your way up.

Ultimately, from an actual financial and professional stand point, my degree primarily helped me land my second job in the government and get to my next band about 6 months earlier than I normally would have. The first job with the government was a position that pretty much any person with a high school diploma or even GED could get and they were taking almost all comers. After that point, it's been one of those things that likely had been a necessary "check box" on my resume for each subsequent position but was not a large reason for me getting the job. And the TYPE of support I'd be more interested in in a law enforcement agency would've been aided by the comp sci degree.

The annoyance of hindsight, but it does make me wonder if it's that we need to do a better job counseling kids about the realities of the future in a realistic way...or if the issue is that regardless of such counseling kids just generally won't listen. Probably a mix of the two.

Well computer science is one of those fields where knowledge is as important as a degree. You could possibly self teach yourself and try entering the field that way. It's never to late to learn something new.
 
I agree.

My Sister in Law for example, went to College and indebted herself to the tune of nearly 80 thousand dollars so she could walk out of their with a uselss Liberal Arts degree.

She's unemployable ( well maybe she could be a barrista ) and she wasted 4 years of her life

She could have invested the same amount of money in a franchise or something. Our society has been telling kids they will be failures without a degree. I would have been better off going to trade school initially myself. At least I am self employed now.
 
the basic stem degrees will still make you a decent living MOST of the time

other degrees will get you jobs in sales, or maybe in your field

spending 80k to get a degree in sociology or history is absolutely freaking nuts

every year, the university of missouri graduates more and more people with journalism degrees

there arent enough jobs in the total field to give people jobs who already had degrees, much less the new graduates

yet....we continue on the merry-go-round

parents need to be more active....and kids need to be aware of what college can and cant do

it may be your dream field.....just be aware that dream could soon be a nightmare

Yep, journalism degrees when Newspapers across the Nation are being sold off for the value of their building and nothing else.

Ridiculous.
 
Just don't get a blow off degree. Do something in computer science or engineering. I have a lot of friends that majored in history and psychology in the hopes that the easy classes would lead to a high GPA and med school. They never got into med school and now are struggling to find work. Always get a degree that matters.


Not everyone is cut out to be and engineer or cut out for Computer science.

A buddy of mine had asperations of getting a degree in Engineering but couldn't get past Calc 1.

Had to switch his major and went into Law enforcement.
 
Not everyone is cut out to be and engineer or cut out for Computer science.

A buddy of mine had asperations of getting a degree in Engineering but couldn't get past Calc 1.

Had to switch his major and went into Law enforcement.
I never said it was for everyone. It's not. I'm just saying if beats getting blow-off degrees. your friend did the right thing, but if he instead decided to pursue a BA in photography it would have been the wrong thing.
 
'College May Not Pay Off for Everyone

Jaison R. Abel and Richard Deitz

In our recent Current Issues article and blog post on the value of a college degree, we showed that the economic benefits of a bachelor’s degree still far outweigh the costs. However, this does not mean that college is a good investment for everyone. Our work, like the work of many others who come to a similar conclusion, is based in large part on the empirical observation that the average wages of college graduates are significantly higher than the average wages of those with only a high school diploma. However, not all college students come from Lake Wobegon, where “all of the children are above average.” In this post, we show that a good number of college graduates earn wages that are not materially different from those of the typical worker with just a high school diploma. This suggests that, at least from an economic perspective, college may not pay off for a significant number of people.'


6a01348793456c970c01b7c6d45dc1970b-800wi


http://libertystreeteconomics.typepad.com/.a/6a01348793456c970c01b7c6d45dc1970b-800wi


So, according to the above, if you're in the bottom 25 percentile of college students, financially speaking, college will do you more harm then good (virtually the same income plus college costs/debt).

I really wish that someone would look at the degree's some of these kids are getting and what fields of study they are going into.

Someone that goes into a hard major such as
science, math, engineering, computer science etc ... is not going to have a hard time finding a job or getting to the next level.

if you go into the soft majors like socialolgy or liberal arts or women studies or some other off beat path degree then yea you are going to have a hard time landing a job and making good money.

they really need to look at student majors instead of just general based assumptions.

there are some degree's that are going to pay off more than others.
 
I never said it was for everyone. It's not. I'm just saying if beats getting blow-off degrees. your friend did the right thing, but if he instead decided to pursue a BA in photography it would have been the wrong thing.

not really photography is a good business and people make a lot of money in it. the key thing to photography is to get in early and do your interships.
you need a lot of real world experience in photography in order to make it in that business.

it is a high risk high reward type of situation but it can pay off if you put in the work.
 
Yep, journalism degrees when Newspapers across the Nation are being sold off for the value of their building and nothing else.

Ridiculous.

Communications is the new journalism. i would never talk anyone into a journalism degree i would put them in a communications degree.
 
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