In the ever-changing landscape of higher education, colleges nationwide are grappling with a pronounced decline in enrollment. While researchers often attribute this trend to lower birth rates and demographic shifts and, recently, the pandemic, the narrative extends beyond these factors. Economic downturns and other factors play a vital role in the decrease in enrollments. Rising economic instability and recessions have affected students’ and parents’ financial capacity. Many find that high tuition and debt horror stories associated with higher education, choice of majors, and return on investment are correlated to declining enrollments in the U.S. This phenomenon, coupled with changing job market demands where specific jobs are being rendered obsolete due to machines replacing humans, is a reality that four-year colleges have been unable to address.
As the traditional notion of attending college and the perceived value of a degree undergo rapid transformation, alternative learning avenues and niche programs are carving out space within the conventional educational realm. The question looms large: “Is College Worth It?” This article summarizes a survey by the Pew Research Center in 2011 and resonates with the sentiments of surveyed Americans and U.S. college presidents. A staggering 57% of respondents felt that the U.S. higher education system needs to provide better value for the money spent, with 75% believing college is too expensive for most Americans. This data shows that the pandemic is given too much attribution to the declining enrollment numbers; the issues in higher ed existed long before the pandemic, though the pandemic served as a tipping point to bring these issues to light.
In the same year, university presidents were split in their outlook, with 60% expressing confidence in the system’s direction, while 38% voiced concern about the direction of higher ed (Pew Research Center, 2011). Only 19% believed the U.S. higher education system was the best in the world (2011). The educational landscape has since undergone seismic shifts, marked by economic downturns and, recently, the disruptive impact of the COVID-19 pandemic. This dual-edged sword has ushered in a significant shift towards the convenience of virtual learning, altering the dynamics of four-year colleges and higher education overall.
Majors that Work
Another critical factor in the decline in enrollments is that potential and enrolled students are witnessing or have experienced the value of their majors and degrees. The New York Times carried an article questioning the utility of useless majors; a major chosen wisely makes all the difference – it affects not only whether the student will finish the degree but also whether they will find a job that pays a living wage. Though data is not concrete, about one-third of students are said to change their majors from the time of declaration upon enrollment, and dropout rates have been around for a while. The persistent issue of college dropout rates in the United States remains a concerning challenge, with 40% of students opting out annually and 38% admitting dropping out due to financial pressures (ThinkImpact, 2021). Statistics reveal that a mere 14.7% of those enrolled in bachelor’s degree programs and 37.5% of associate’s degree enrollees complete their studies within six years (Hanson, 2021).
Why would anyone want to major in a subject that does not lead to a well-paid job? A key finding from the Pew Research Center is that recent college graduates, especially those aged 22 to 27, are more likely to be underemployed, meaning they work in jobs that do not typically require a college degree (Schaeffer, 2022). According to an analysis of Census Bureau and BLS data by the Federal Reserve Bank of New York, as of December 2021, 41% of college graduates in this age group were underemployed, compared to 34% among all college graduates (2022). It is unfair to lump all the above categories together, but it is a fact that some degrees are more valuable than others. The most prominent activity that counselors at high schools and colleges are part of, perhaps unknowingly, is encouraging students to pursue their hobbies and dreams. Hobbies not based in STEM or other viable majors that result in dropout rates or, worse, a degree but underemployment and debt serve as a significant disservice to students.
Many students are catching on. According to Nietzel, a former university president, the most popular majors among prospective college students are – Business, Nursing, Psychology, biology, and Medicine/Pre-Medicine for the graduating class of 2022, while Medicine/Pre-Medicine was second most famous for the class of 2023, switched with Nursing (2022). The study design used data collected by Niche, a renowned college rating and review platform. Niche gathered evaluative information on K-12 schools and living and working environments and analyzed responses from 935,830 high school students graduating in 2022 or 2023. These students, registered on Niche, provided information about their intended majors, forming the basis for the study’s insights. Indeed.com, a widely used online job search platform and one of the largest and most popular job search websites globally, lists the top majors in demand, and out of the twenty-three majors listed, not a single major listed is from the Humanities. However, Psychology and Economics are listed as sought-after majors under the Social Science umbrella. Some of the top majors in demand are Nursing, Computer Science, Medical Assisting, Mathematics and Statistics, Accounting/Business/Finance/Marketing, Physical Therapy, Civil Engineering, Public Relations, etc. (Indeed.com, 2023).
Rising Budgets and Costs
According to College Tuition Compare, in the U.S., 2,229 colleges offer Liberal Arts, Sciences, and Humanities programs at various levels, with average undergraduate tuition ranging from $9,895 to $29,014 (2023), just slightly lower than STEM majors. At the graduate level, 213 schools offer programs with an average tuition of $11,421 to $24,868 and post-completion, average salaries are $36,833 with a bachelor’s degree and $53,331 with a master’s degree or higher (2023). Many graduates still wonder where the payoff is for majoring in liberal arts and the humanities. For example, a public university charges approximately 6k in-state tuition per semester for a Liberal Arts and Fine Arts major and majors such as Architecture, Communication, Education, Social Work, and Natural Sciences. However, it is common knowledge that the payoff is mainly for non-liberal arts majors and fields.
Economic conditions, including recessions or financial instability, can significantly impact families’ ability to afford the rising costs associated with a college education. College expenses have consistently outpaced inflation rates over an extended period, prompting students to seek more cost-effective alternatives or enter the workforce. According to a recent report from My eLearning World, college education costs have surged approximately 4.6 times higher than the inflation rate over the past five decades (Giovanetti, 2021).
While tuition increases may have slowed slightly since 2021, McGurran (2023) notes that in 1980, attending a four-year college full-time cost $10,231 annually, adjusting for inflation. By 2019-20, this figure had risen to $28,775—an increase of 180%, as reported by the National Center for Education Statistics. Since college costs have multiplied compared to inflation over the past fifty years, the inevitable consequence is a decline in the pursuit of higher education. College enrollment, which has already been on a downward trajectory for the past decade, experienced a further decline during the pandemic, with nearly 1.4 million students (9% of total enrollment) dropping out between spring 2019 and spring 2023 (Welding, 2023). This trend clearly shows that the enrollment issues in higher ed predate the pandemic, though it contributed to jolting the student body from its slumber.
Students began wondering why they had to pay thousands in tuition per semester to learn virtually while community colleges offered the same at a much lower cost. The tide has begun to turn. The growing awareness of options coupled with student loan debt and its potential long-term impact on financial well-being further dissuades individuals from seeking higher education, especially if they perceive alternative viable options.
Student Loans and Debt – The Bane of Higher Ed?
The recent surge in student loan debt in the United States has become a substantial concern, impacting graduates’ financial prospects. Many express anxiety about navigating a challenging job market, fearing lingering debt might hinder their financial futures. The consistent increase in tuition and living costs forces students to rely heavily on loans, as more than scholarships are needed to cover rising education expenses. Currently, the estimated student loan debt at graduation is around $37,650, accumulating interest rates causing individuals who have been out of school for years to owe more than recent graduates (Hanson, 2023a). The average student loan debt at graduation has surged by 106% since 2007, and even after adjusting for inflation, there is a significant 41% increase (2023a).
Breaking down the figures, the typical federal student loan debt per borrower is $37,338, and private student loan debt averages $54,921; students, on average, borrow over $30,000 to pursue a bachelor’s degree (Hanson, 2023b). Over the past two decades, student debt in the United States has more than doubled, reaching over $1.7 trillion as of March 2023. This sum, covering federal and private student loans, now exceeds auto and credit card debt, making it the second-largest debt category after home mortgages (Council on Foreign Relations, 2023). Student loans – the idea and implementation are simply unsustainable. First, only some high school graduates are cut out for a four-year degree, and getting an education is not confined to universities.
Many borrowers manage multiple federal loans, often alongside private student loan debt. Nearly half of students borrowing for education are still repaying loans 20 years later. The Education Data Initiative report shows averages, with Stafford loan holders owing $24,917 on average and subsidized and unsubsidized Stafford loans at $9,638 and $18,700, respectively. Grad PLUS loans average $56,882, and Parent PLUS loans carry an average of $29,081 (Hanson, 2023b). Consolidated federal loans average $50,936, while Perkins loans, although discontinued in 2017, persist with an average of $2,923 per loan. Notably, 45% of federal borrowers owe less than $20,000, while 10% owe more than $100,000 (2023b). These graduates seem to have been misled multiple times along the way – from being encouraged to pursue a college that is out of reach – financially or being out of State, to the lure of scholarships that are not full-rides, to picking majors and minors that do not pay but are easy to get into due to lowering of standards – example, GPA, SAT/ACT scores not needed to apply, as well as college loans – which put the student in a perpetual cycle of debt.
Fresh graduates do not fare any better; they often fare worse. New graduates’ average total student loan debt-to-income ratio (DTI) is 63%, with an anticipated monthly payment of approximately $289. Adjusting for inflation, the Class of 2020 graduated with the highest amount of debt, carrying an average balance of $43,140 in September 2023 (Hanson, 2023a). It is important to note that the federal government provides loan forgiveness at $95.45 per borrower (2023b). The federal government needs to overhaul federal student loans – this might be addressed in a separate article. However, as long as the loans are available, students will continue to make poor choices, not fully understanding that loans have life-long repercussions.
Student loans have significantly impacted the lives of many Americans to date. A Federal Reserve Bank of New York report in August 2023 indicated that national student loan debt reached almost $1.57 trillion in the second quarter, decreasing by $35 billion from the previous quarter (Wood, 2023). Data reveals a higher rate of loan defaults among Black and Hispanic borrowers, with a 2020 study showing a nearly twice as high default rate in majority-Black zip codes compared to majority-white zip codes. Most Hispanic zip codes experienced an intermediate default rate of 13% (2023). Borrowers sometimes need more financial preparation and awareness of policy changes to start repaying loans, especially those seeking a more substantial return on their college degree in terms of viable employment.
Student loans and debt have haunted people for decades. Higher education enhances lives through better job opportunities, increased stability, higher income, and peace of mind. However, the significant financial and psychological toll of student loan debt prompts individuals to question the actual value of their degrees. Experts emphasize that student loan debt profoundly impacts the overall quality of life, particularly for those who turn to loans to finance their education and those who default. The distressing default status, reached after over 270 days of overdue payments, leads to potential legal repercussions and loss of eligibility for further federal student aid (Federal Student Aid, 2023). Defaulting on student loans has a detrimental effect on credit scores, significantly hindering financial standing and leading to a mental health toll. The negative consequences are well-documented – unpaid loans prevent people from purchasing cars and homes. This impact becomes more pronounced when students enter default, as the consequences extend beyond the presence of debt.
State Funding
Colleges, too, need help to sustain and are trying their best to float after the devastating effects of the pandemic. Public institutions heavily rely on state and local funding, constituting 55% of revenues for public two-year colleges and 44% for public four-year colleges in 2018-19, according to the College Board and economic downturns, like the Great Recession in 2008, led to funding cuts, and as of 2020, average education appropriations for a full-time equivalent student were still 6% lower than in 2008 (McGurran, 2023). When state funding is limited, colleges are bound to increase tuition. This phenomenon comes at a cost to colleges within universities and department heads and development officers, who then have to dedicate their time to soliciting donors and setting up endowments to sustain the budgetary gap. Many states have continuously decreased funding lines once a tenure-track professor retires. To meet teaching demands, departments are either operating in the red, “borrowing” money from other colleges within the university, or at the whims of donors and, thereby, their political agendas.
Financial pressure poses a significant challenge for colleges, with rising operational costs contributing to a strain on their financial resources. This includes increased expenses related to faculty salaries, maintenance, and administrative costs. The resulting budgetary constraints can limit colleges’ ability to make essential investments in infrastructure or program improvements, hindering their overall competitiveness and ability to provide quality education. For example, after the pandemic, the History and Sociology 101 classes, which used to pack 300 students, look different now. Also, there is always a need for more resources, and funds from well-funded colleges often trickle out to struggling departments and areas. Years of such budget “shuffling” eventually lead to debt, which many humanities and social science colleges are currently experiencing. It is a familiar phenomenon for a college to operate in ‘red’ for decades without much changing.
Additionally, colleges must contend with the evolving demands of the job market and changes in the skills required by employers. Failure to adapt to these shifts may impact the perceived value of specific academic programs, making it challenging for colleges to attract students and remain relevant in the ever-changing educational landscape. Colleges often fear making cuts due to self-implemented Diversity and Inclusion criteria. Hypothetically speaking, how and why does a university sustain an English Professor who manages to attract less than the required quota of undergraduates in a class that draws 96k a year? How is tenure a sustainable option for such an individual? States need the plan to sustain majors and degrees that pay off, as the tax dollars will eventually fund public universities and various initiatives regarding higher education within the State. State-funded universities incur intangible losses when college graduates who cannot find work move out of the State, further imposing upon the taxpayers. This loss leads one to rationally examine solutions related to state government investing in college programs where graduating students receive a proper education and are likely to find employment within the State.
Alternate Pathways
The rise of online education and the accessibility of learning resources on the internet have provided alternative avenues for acquiring skills and knowledge without the need for physical attendance at a traditional college. The availability and acceptance of alternative pathways, such as vocational training, online certifications, and apprenticeships, can divert students from traditional college enrollment. Data shows that several associate degree majors lead to better pay than a traditional four-year bachelor’s; Radiation Therapy, Software Engineering, Management Information Systems, Network Engineering, Biomedical Engineering Technology, Civil Engineering, Aviation, Construction, and Ultrasound two-year degrees can reap rewards with their choices, with graduates making up to six figures mid-career (Picchi, 2023). While only some individuals with an associate degree will secure a six-figure income immediately upon graduation, previous studies indicate that those with a two-year degree typically earn an average of $42,000 in their early career. In contrast, during the corresponding stage of their careers, individuals with a bachelor’s degree earn approximately $57,000 per year (2023). Alternate pathways are here to stay and pose a formidable challenge to traditional four-year education as more students know what is best for them.
In sum, college enrollments decline due to economic factors, and choosing a major/area of study impacts enrollment, considering issues like dropout rates and underemployment. Financial challenges, increasing tuition, and student loan debt raise questions about the value of college and the federal student loan system. Here are some horror stories about student loan debt, some of whom are six-figure debt, forever stuck in the dysfunctional cycle. Colleges grapple with funding challenges, affecting their utility too, and no clear solution to this downward spiral is in sight. Critics are suggesting gutting liberal arts, humanities, and diversity and inclusion departments to be gutted and setting up a better business bureau equivalent for colleges. The situation is serious, and I know many immigrant and first-generation parents who believe education to be the great equalizer (which it might be, with a considerable caveat) and thereby get fooled by majors which seem like scams that pay crappy salaries saddling students with debt which cannot be discharged in bankruptcy. Parents who wish to send their children to the U.S. from other nations find out the harsh realities of education in the U.S. and, even worse, losing their children to leftist indoctrination. A lot of immigrant parents end up wasting money on colleges and majors, pay out-of-state tuition only to find out the truth too late, and are embarrassed to share their stories.
There might be some hope, however. The rise of alternative pathways like online education directly challenges traditional four-year models and, more importantly, is a more viable investment in careers that pay. This complex landscape necessitates a comprehensive reevaluation of higher education to address accessibility, affordability, and relevance amid these changes. This situation requires a thorough reassessment of higher education to remain relevant.
References
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Federal Student Aid. (2023). “Default.” Studentaid.gov, retrieved from https://studentaid.gov/help-center/answers/article/default
Giovanetti, E. (2021). “College costs have risen at nearly 5x the rate of inflation, report finds.” Fox Business, College costs have risen at nearly 5x the rate of inflation, report finds (foxbusiness.com)
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Picchi, A. (2023). “These Associate Degree Majors lead to Higher Incomes than a 4-Year Bachelor’s.” CBS, https://www.cbsnews.com/news/college-associate-degrees-higher-income-than-bachelors-degree-top-earning/
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