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Too Many Degrees Are a Waste of Money

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#1 Turk.

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Posted 04 April 2014 - 10:50

By The Economist April 5th 2014
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Hard subjects pay off

Unsurprisingly, engineering is a good bet wherever you study it. An engineering graduate from the University of California, Berkeley can expect to be nearly $1.1m better off after 20 years than someone who never went to college. Even the least lucrative engineering courses generated a 20-year return of almost $500,000.

Arts and humanities courses are much more varied. All doubtless nourish the soul, but not all fatten the wallet. An arts degree from a rigorous school such as Columbia or the University of California, San Diego pays off handsomely. But an arts graduate from Murray State University in Kentucky can expect to make $147,000 less over 20 years than a high school graduate, after paying for his education. Of the 153 arts degrees in the study, 46 generated a return on investment worse than plonking the money in 20-year treasury bills. Of those, 18 offered returns worse than zero.

Colleges that score badly will no doubt grumble that PayScale’s rankings are based on relatively small numbers of graduates from each institution. Some schools are unfairly affected by the local job market—Murray State might look better if Kentucky’s economy were thriving. Universities that set out to serve everyone will struggle to compete with selective institutions. And poor colleges will look worse than rich ones that offer lots of financial aid, since reducing the cost of a degree raises its return.

All these caveats are true. But overall, the PayScale study surely overstates the financial value of a college education. It does not compare graduates’ earnings to what they would have earned, had they skipped college. (That number is unknowable.) It compares their earnings to those of people who did not go to college—many of whom did not go because they were not clever enough to get in. Thus, some of the premium that graduates earn simply reflects the fact that they are, on average, more intelligent than non-graduates.

What is not in doubt is that the cost of university per student has risen by almost five times the rate of inflation since 1983, and graduate salaries have been flat for much of the past decade. Student debt has grown so large that it stops many young people from buying houses, starting businesses or having children. Those who borrowed for a bachelor’s degree granted in 2012 owe an average of $29,400. The Project on Student Debt, a non-profit, says that 15% of borrowers default within three years of entering repayment. At for-profit colleges the rate is 22%. Glenn Reynolds, a law professor and author of “The Higher Education Bubble”, writes of graduates who “may wind up living in their parents’ basements until they are old enough to collect Social Security.”

That is an exaggeration: students enrolling this year who service their debts will see them forgiven after 20 years. But the burden is still heavy for many. It does not help that nearly a third of those who take out such loans eventually drop out of college; they must still repay their debts. A third transfer to different schools. Many four-year degrees drag on longer, and so cost more. Overall, the six-year graduation rate for four-year institutions is only 59%.

The lousy national job market does not help, either. A report by McKinsey, a consultancy, found that 42% of recent graduates are in jobs that require less than a four-year college education. Some 41% of graduates from the nation’s top colleges could not find jobs in their chosen field; and half of all graduates said they would choose a different major or school.

Chegg, a company that provides online help to students, collaborated the study. Dan Rosensweig, its boss, says that only half of graduates feel prepared for a job in their field, and only 39% of managers feel that students are ready for the workforce. Students often cannot write clearly or organise their time sensibly. Four million jobs are unfilled because jobseekers lack the skills employers need.
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#2 ShockD

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Posted 05 April 2014 - 11:30

I don't know about waste of money, but it sure is a waste of time. And if time = money then... there you go.



#3 Praetor

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Posted 10 April 2014 - 02:56

its not a waste of money because you get more knowledge and knowledge is power.



#4 COKid

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Posted 10 April 2014 - 03:19

its not a waste of money because you get more knowledge and knowledge is power.

 

Sure, but if you can obtain the same knowledge at little or no cost, then all the better. You can be powerful and not be in debt up to your ears. College is mostly a racket to separate you from your money. And for what? A piece of paper. I've dealt with many people with college degrees who have less knowledge than high school drop-outs who are motivated, self-taught individuals.



#5 vcfan

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Posted 10 April 2014 - 03:25

I don't know about waste of money, but it sure is a waste of time. And if time = money then... there you go.


as someone with an engineering degree, i can tell you that it was neither a waste of time nor a waste of money.

#6 Praetor

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Posted 10 April 2014 - 10:31

Sure, but if you can obtain the same knowledge at little or no cost, then all the better. You can be powerful and not be in debt up to your ears. College is mostly a racket to separate you from your money. And for what? A piece of paper. I've dealt with many people with college degrees who have less knowledge than high school drop-outs who are motivated, self-taught individuals.

 

that may be the reality in many countries (including US, where public universities aren't as good/recognized as private ones), but not every place is like that. For example, in my country all the medicine universities that exist are public ones and lectures over there are over the top and the best in the world; engineering, law and nursing are also top courses (nursing for example is such a high profile course that most of the students right now emigrate because the amount of foreigner hospitals requiring Portuguese nurses is crazy - and they pay well), so again knowledge is important; of course there's always folks that have a degree but aren't as professionals, motivated or simply incompetent - that is true in every profession. If they are knowledgeable? yes. If they use that knowledge? probably not, because if they did then they wont be such bad professionals like they are.

 

myself i don't have a degree but i'm a very motivated to self taught, i hold several courses and certificates and i'm studding at night in a university so i can expand my knowledge base because i understand that if one must succeed then it's the amount of knowledge and it's use that makes or breaks a professional.



#7 +Nik L

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Posted 10 April 2014 - 10:36

Why do I only employ degree educated developers?

 

Do I believe they are more skilled?  No

Do I believe their academic experience outweighs commercial? No

Do I believe that having a degree sets you in any way "better"? No

 

It reflects to me that they took something on, saw it through to completion, and it provides me with a justification - a provable, hold it up and look at it written copy that they know what they say they know.

 

Simple



#8 Soldiers33

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Posted 10 April 2014 - 10:38

From my personal experience I can agree that Uni is the most biggest waste of time and money and effor. I would have gone much further doing different courses and gaining experience than learning trash which I would never use in real life. Unfortunately I only realized that after my second year and would be a waste to drop out on the last year. Luckily my student loan was only 9k, so it wont take too long to repay.



#9 blerk

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Posted 10 April 2014 - 10:40

that may be the reality in many countries (including US, where public universities aren't as good/recognized as private ones), but not every place is like that. For example, in my country all the medicine universities that exist are public ones and lectures over there are over the top and the best in the world; engineering, law and nursing are also top courses (nursing for example is such a high profile course that most of the students right now emigrate because the amount of foreigner hospitals requiring Portuguese nurses is crazy - and they pay well), so again knowledge is important; of course there's always folks that have a degree but aren't as professionals, motivated or simply incompetent - that is true in every profession. If they are knowledgeable? yes. If they use that knowledge? probably not, because if they did then they wont be such bad professionals like they are.

 

myself i don't have a degree but i'm a very motivated to self taught, i hold several courses and certificates and i'm studding at night in a university so i can expand my knowledge base because i understand that if one must succeed then it's the amount of knowledge and it's use that makes or breaks a professional.

 

It depends really. The US is well known for having some very good public universities, and university systems (UC and Maryland come to mind immediately). Some of them might not have the brand name cachet of a private Ivy, but there are definitely public universities that are renowned for being the best in various areas, better than their private counterparts.



#10 dipsylalapo

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Posted 10 April 2014 - 10:41

They may be seen as a waste of money but to get a job in today's market, a degree is more or less required (at least in the UK). 

 

And I think Nik L proves my point. :p



#11 Praetor

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Posted 10 April 2014 - 10:45

It depends really. The US is well known for having some very good public universities, and university systems (UC and Maryland come to mind immediately). Some of them might not have the brand name cachet of a private Ivy, but there are definitely public universities that are renowned for being the best in various areas, better than their private counterparts.

 

oh thanks for the input. :)



#12 Soldiers33

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Posted 10 April 2014 - 10:49

They may be seen as a waste of money but to get a job in today's market, a degree is more or less required (at least in the UK). 

 

And I think Nik L proves my point. :p

you are talking rubbish. If anything here in UK degree doesnt mean anything anymore. Its all about experience. You go interview and have all the skills, but they want experiance. The amount of interviews ive taken and matched everything, but in the end came second and the response was always the other guy has experience. These days I tell no one to go to Uni cause its waste of time, which will make you end up with a loan of 44k in total.



#13 dipsylalapo

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Posted 10 April 2014 - 10:52

you are talking rubbish. If anything here in UK degree doesnt mean anything anymore. Its all about experience. You go interview and have all the skills, but they want experiance. The amount of interviews ive taken and matched everything, but in the end came second and the response was always the other guy has experience. These days I tell no one to go to Uni cause its waste of time, which will make you end up with a loan of 44k in total.

 

It depends on what sort of level of position you're going for, with someone with < 3 years experience they won't even consider you if you don't have a relevant degree. 

 

I should have made that clear. I agree as you get more experience your degree counts for less, but starting off in the job market a degree does check a box for recruiters.



#14 +Nik L

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Posted 10 April 2014 - 10:57

If anything here in UK degree doesnt mean anything anymore.

 

It does when I am hiring, and many think like me.



#15 Skiver

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Posted 10 April 2014 - 11:04

I think it depends on the job and level you are trying to achieve. If you take two people, send one to University/college to do an engineering degree and send one straight to a car garage to gain the hands on experience etc. In the 4 years or whatever it takes for the Uni guy to gain the knowledge the hands on guy imo would be more employable to another garage.

 

However take the two people and send them to apply for a motorsport team (F1, GP2 etc) and I would put my money on the graduate being the right man for the job. Could be very wrong with this but I honestly believe that's where degree's make a difference and some roles just don't need that deeper level of knowledge you may gain from a degree.