Myths about the value of college

ARGH, I’m seeing so much misinformation going around in twitter because of student loan forgiveness.  It’s driving me crazy.

Myth:  The value of a college degree is not worth it.
Reality (based on recent work of David Autor, but also many many other people): Even with the high costs of a degree and student loans, the additional earnings make it worth it for most college graduates.
Sub-Reality (I don’t remember a big name on this one, but lots of people are studying it with mixed results): The benefit of going to college and not finishing– we’re not as sure about that. Depending on the loans that you take out, it may not be worth it to spend a couple years in college and then not have a degree (though 2 years at community college with a degree is worth it). And lots of people go to college, take out loans, and don’t finish. That is a problem that lots of people are studying.
Sub-Reality (David Denning and several other papers): Even a degree from a for-profit college usually does result in higher earnings, but you are no better off with a for-profit degree than you would have been with a community college degree (worse given student loans, though the worst offenders have thankfully been addressed in the new Biden thing). They provide the same benefits, it’s just the for-profit degree is stupidly expensive by comparison.

Myth: It is better to go to a low tuition regional school (or community college) than to the best school that you can get into.
Reality (Hoxby and Turner in an amazing RCT, and other papers that are not experiments but use clever regression discontinuity designs): Schools with better endowments 1. Give more and better financial aid, meaning that for poor kids who can get into them, a state flagship or a highly endowed private prestige school will cost less. And 2. More prestigious schools do a better job of retaining low income kids– this seems to be through a variety of methods– better financial aid means working fewer hours, but also they just have a lot more resources devoted to keeping low SES kids, offices, sometimes mentorship programs, short-term loans etc. That means for low income kids, the more prestigious school means that they’re more likely to actually *graduate.* And, we also know among graduates (through a lot of different papers, though no RCT to my knowledge), prestigious schools help low SES kids make more money as grownups than do less prestigious schools.
Sub-Reality: For middle/upper middle/rich class kids, it doesn’t matter. They just need a degree.  (And the rich probably don’t need a degree.)

Myth:  The skyrocketing cost of college is caused by financial aid accessibility.
Reality: The skyrocketing cost of college is caused by decreased federal and especially state investment in state schools. (And to a much smaller extent: better quality education, gambling on fancy sports programs that don’t pay out, fancy dorms at private schools, etc. But this is like nothing compared to the effect of how much the government has stopped subsidizing higher education.)

And some stupid Republican propaganda:

Myth:  Non-college training is free.
Reality: Truck driving requires CDL training. Hairdressing requires training. Nursing requires training. Plumbing requires a TON of training. So many professions that don’t require a college degree still require technical training which still costs money.

Myth: Working class people don’t have student loans
Reality: A lot of people drop out of college and have student loans. A lot of people get student loans to pay for technical training.  Plenty of working class people have student loans.

It still boggles my mind that only 30-35% of US adults have college degrees.  But a big percent start but then drop out without an additional degree.  (You can get exact numbers from http://www.ipums.org)

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31 Responses to “Myths about the value of college”

  1. Michael N Nitabach Says:

    This is a great post! I know you are responding to the lies about “value” of college being spewed by right-wingers who think the only thing of value in life is money, so it is of course completely sensible that you have responded with data on future monetary earnings. Are there any studies of the future value of college in non-monetary terms, such as happiness, health, etc?

    • nicoleandmaggie Says:

      That’s a great question re happiness and I don’t know of any good studies. The correlation is positive, but I don’t know about anything getting close at causation. That doesn’t mean there isn’t anything just that I haven’t come across it.

      There is a literature exploring health but to my knowledge it isn’t settled. We do know that money leads to better health (causally) but does education add to health above and beyond that? People study it but it’s hard to pin down.

  2. Omdg Says:

    What’s the research on whether liberal arts degrees are “worthless” (another talking point that I’ve been hearing a bunch lately)?

    • nicoleandmaggie Says:

      Ah I should have addressed that one! We do know this one! It made a big splash recently.

      Controlling for stuff like SAT score, gender, etc.

      STEM majors have higher starting salaries but liberal arts majors catch up later. I don’t remember the details.

      • Alice Says:

        Speaking as a liberal arts major: I more than caught up financially, and have the added benefit of being happy in my career. I know a number of engineers in their 30s and 40s, none of whom are happy in their careers. I also know a few unhappy medical doctors. These particular engineers and the medical doctors feel trapped by their educations– they feel that it would be a “waste” of their studies to chuck it all and do something else at this point. They didn’t pick their fields for love of the fields. They picked them because they had the aptitude and wanted higher incomes.

        I think that in an odd way, being the sort of person who said, “no, I’m going to major in English because I love literature” set me up for greater happiness. My career isn’t a literary career–not truly related to my field of study. I still enjoy books, though, and at work I still apply the logic and analysis that I practiced in my studies. Happiness is its own value.

        As a side note, prompted by thinking about the logic/analysis: I do think that it’s worth considering the societal impact of de-valuing liberal arts and how doing so feeds problematic conservative thought patterns. The way that STEM is used annoys me a bit, even when it’s turned into STEAM. If you cut away literature/history/languages/etc., you cut away important avenues of thought and interacting with the world around you. You cut away things that hone critical thinking skills and support reasoned arguments about why to do/not do different things. STEM fields are great, STEAM fields are great… but they are not the only paths.

      • nicoleandmaggie Says:

        There’s a lot of privilege in being able to think of passion instead of earnings potential (and college as coming of age instead of job training). Somewhere we’ve got a post on that.

        Another comment on doing what you love

      • Michael N Nitabach Says:

        I know plenty of engineers, scientists, and physicians in their 40s & 50s who studied those topics in college & chose those career paths because they found those fields fascinating, and who are extremely happy now with those choices. The assumption that everyone would be a humanities major if only they weren’t a greedy tight-ass is, of course, completely unwarranted.

      • nicoleandmaggie Says:

        I’ve been having a hard time thinking of anyone who isn’t happy with their engineering career… just the retire by 40 guy. It is true that some people are pushed into management when they’d rather be doing technical stuff but most of them have switched jobs to stay technical. But also our friends are a selected sample. I didn’t keep in touch with the people in my hall at college whose parents were forcing them into premed.

        I think Alice wasn’t referring to people who went into STEM because they liked it. We have a very early post about how liking math is remunerative!

      • nicoleandmaggie Says:

        Side note: I have a friend whose immigrant parents misguidedly forced her into an English major when she wanted to do computer science (she was allowed to minor in CS). She designs computer games.

  3. rose Says:

    THANK YOU FOR THIS INFORMATIVE POST!!!!

  4. EB Says:

    Working class people have LOTS of loans, and often no degree to justify them. Or they have kids with big loans. I saw the other day (can’t remember where) that 90% of the loan forgiveness will be enjoyed by people with incomes under $75,000. And wealthy people who come from wealth or even just from the upper middle class are exactly the ones who have no loan debt, because parent contributions and 529 plans paid their entire tuition. So, no, the working class is not being required to absorb the cost of loans that went to the wealthy.

    On the issue of who benefits from college, I think you get it right with respect to students who enroll at (or are accepted by) R1 universities and very selective privates. But it’s important to disaggregate a bit here. There are also literally millions of students who are not well-prepared enough (or motivated enough) to enroll at those colleges; they are at non-selective privates and regional publics that will admit almost anyone who graduates high school, in order to fill their seats. These students are left to major in fields that are neither STEM nor liberal arts, but things like communications, marketing, sports management, hospitality, etc that are not demanding but also don’t lead to good jobs. If the student even graduates. I have several relatives who have been sucked into these sorts of programs, finished and ended up with jobs like assistant manager of a call center or didn’t finish at all. This is true exploitation.

    • nicoleandmaggie Says:

      Actually– if you (are low SES and) can get into those schools, you are BETTER OFF at the more prestigious school regardless of how prepared you are– this is because the better off schools have more resources and a better safety net and they will cost less for poorer kids. This is true in a beautifully randomized controlled trial where they induced kids to apply to these schools and in less-RCT work. Better schools are better for kids who aren’t well-prepared.

      For kids who can’t get into the aforementioned schools, it’s still an area of active research. (See sub-reality for the first myth.)

      Another Reality I should have mentioned (more recent David Autor research, but also other people):
      People with college degrees who work at jobs that don’t require a college degree are more productive/paid more than the people at the same job who don’t have a college degree. Something about college makes people get paid more (and college worth it) even if they work in jobs that don’t require a degree.

      Assistant manager of a call center is a much better job than call center worker!

  5. Debbie M Says:

    Wow, I didn’t know it was still true that expensive colleges could be cheaper. I also didn’t know that Liberal Arts majors catch up (in general–not me).

    Sadly I fear the real “problem” is that people who go to college become more socially liberal, not because of brainwashing by liberal professors but because they meet more kinds of people.

    • Omdg Says:

      I was a sociology major and I caught up majorly.

      • Alyce Says:

        How does graduate school factor in? I was an urban studies and sociology major in undergrad, and although I make a ton of money now, I definitely attribute it to my law degree, not my undergrad. I couldn’t have my current job (and salary) without the graduate degree. I don’t think undergrad should get the credit for my earnings. (Though I love my liberal arts college dearly.)

      • nicoleandmaggie Says:

        I think the David autor stuff looks at people with grad degrees separately (as well as vocational degrees separately).

  6. nicoleandmaggie Says:

    I do think something a lot of people with BAs aren’t aware of is how extremely low income is for people without post high school degrees. On top of that additional education affects marriage and partnership prospects meaning college educated people are more likely to marry higher earners resulting in higher family income (and are more likely to stay married). (Not sure how much is causal.)

    • First Gen American Says:

      I think this point is huge. Everyone I hang out with now finished college. Even all my neighbors are educated. And if a spouse doesn’t work, they used to before kids or met in college, etc…. It was the opposite in my poor neighborhood. No one was educated and many were HS dropouts. Am I a suddenly a snob now? No. It’s just all my “work friends” all needed degrees as well so those were just the default people I got to know first. It does put you in a different demographic for life, whether you are a high earner or not.

      The other thing, is you are more likely to relocate to a better place with more jobs if you’re educated. College level jobs often have relocation packages that help you move. You’re not stuck in the place where you grew up because of cost.

      • nicoleandmaggie Says:

        Absolutely—the literature is strong on this too. Educated people relocate to better jobs (often to productive cities/suburbs, especially educated couples), people without degrees stay near their support networks.

      • Debbie M Says:

        I was shocked to find that one of the gals in my craft group not only did not have a graduate degree (like most of my friends) but also didn’t go to college. She had undiagnosed dislexia throughout her childhood and thought she was stupid.

        Yet now she’s a financial analyst whose only real problem is that some people won’t even consider her for jobs because she doesn’t have that degree. One company actually was ready to hire her, saying she was by far the best candidate, and then asked, “so where did you get your degree?” “Oh, no degree!” And then they didn’t hire her. She did get a job elsewhere that she likes (except for the lying about the commute). And she did get a relocation package (the whole reason for this job search was to get out of Texas and into Santa Fe).

        When we found out she had no degree, I’m afraid we accidentally offended her with our shock and our questions.

        The world is an interesting place. There are trends and there are outliers.

  7. First Gen American Says:

    I’m a big fan of college education. It’s made almost every aspect of my life better. However, I was very poor so I qualified for a lot of aid.

    I think we are reaching an inflection point where the ROI on student loans isn’t a slam dunk in every case. A better life with a degree was more of a sure thing a generation ago.

    I now live in an area where people earn a lot but and some kids have parents who never saved for them but also couldn’t qualify for any aid. One kid not much older than my son wracked up nearly $300k of debt for undergrad (and not in a high paying major). Not sure how that was the right decision without family money to fall back on. I feel bad that someone never helped that kid do the math. That dream school will be a nightmare once it’s time to pay that back.

  8. Matthew D Healy Says:

    Today’s NY Times has an essay by Susan Dynarski explaining why she has changed her views: she used to oppose student debt forgiveness but now she likes Biden’s plan.

    • nicoleandmaggie Says:

      She’s one of our leading experts on the effects of higher education. (Also poverty and education more generally.)

      • Matthew D Healy Says:

        Yes indeed. It means a lot to me that she says her views have changed, because I am not an expert in Economics! I have informed opinions about Virology, Drug Discovery, and Energy Infrastructure because I have actual expertise in those fields, but for Public Policy in general I don’t. And the only area of the Law in which I have some expertise is Intellectual Property from being in Biotech and named as an Inventor on patents; I certainly know very little about financial law.

  9. maya Says:

    Thank you so much for this helpful and succinct cheat sheet :)!

  10. Good Things Friday (185) and Link Love « A Gai Shan Life Says:

    […] didn’t get the chance to read Nicole and Maggie’s Myths about the value of college well enough the first time around so I’m linking it because it should be read. As a liberal […]

  11. nicoleandmaggie Says:

    @sciliz you are forgetting LPN/VPN (1 yr) and CNA/HHA (<1 year, sometimes <2mo) nursing degrees.

    The other points are addressed in the original article (we know graduating is worth it, attending is more mixed, private schools with big endowments are cheaper than state- if they’re not that’s obvious at the financial aid stage, etc.)


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