Is the anti-college debate over?

Yahoo Finance

Is the anti-college debate dead?

Now watching

Next video starts in : 7 Play

Is the anti-college debate dead?

Is the anti-college debate dead?
Replay video
Up next

And you thought the Yo app was goofy

And you thought the Yo app was goofy Up next

And you thought the Yo app was goofy

It was fun while it lasted but we’re going to call it, folks. The anti-college movement is dead.

Say what you will about rising tuition, student loan bubbles and the merits of early entrepreneurship but, as with global warming and human evolution, you simply can’t ignore the facts.

This report by the Pew Research Center sealed the deal for us. Based on a study of more than 2,000 millennials ages 25-32, along with decades worth of Census data, researchers found young college graduates are out-earning and outperforming their peers on nearly every front. 

“Not necessarily everything is rosy for the typical young college graduate but, when you ask them about their college experiences, they’re fairly positive overall,” Rick Fry, senior researcher for Pew, who co-authored the report, told Yahoo Finance.

Just in case you weren’t convinced, here are a few signs a college degree is still worth your money.

College graduates are more likely to find jobs and stay out of poverty — plain and simple.

Young people with college degrees today are far less likely to wind up unemployed (3.8%) than high school graduates (12.2%), according to Pew. In fact, high school diplomas are worth less today in the job market than they were four decades ago. When compared to earlier generations, unemployment rates are nearly three times as high for high school graduates today as they were for high school grads in the 1960s.

“[The study] really does suggest that the opportunities for people who end their education at high school … have been strongly constricted to what they were 30 or 40 years ago,” Fry says. “There’s just not that many good opportunities today.”

With job insecurity comes financial insecurity for high school grads. Census data show that, among millennials ages 25 to 32, more than 20% with only a high school diploma are living in poverty today, compared with 6% of college-educated young adults. Of course, these data are for the typical college graduate. Area of study still matters a lot when it comes to earning power. An engineer will most likely always earn more out of college than a liberal arts major, for example.

A high school diploma has never been worth less.

Everyone pays so much attention to assigning value to college degrees, but the real focus should be on the dramatic decline in the value of a high school education.

“While earnings of those with a college degree rose, the typical high school graduate’s earnings fell by more than $3,000, from $31,384 in 1965 [in 2012 dollars] to $28,000 in 2013,” according to the report. “This decline, the Pew Research analysis found, has been large enough to nearly offset the gains of college graduates.”

The reality is that today’s job market simply isn’t as bountiful for high school graduates as it was three or four decades ago. Blue collar manufacturing jobs were once the bread and butter of uneducated workers and yet those industries are rapidly disappearing (at least in the U.S.).

In the report, nearly 90% of young college graduates said they think of their current job as a career, compared to just 57% of high school graduates.

The pay gap between high school graduates and college graduates has never been higher.

Probably the most compelling argument in favor of a college degree is also the most obvious — those with a degree simply earn more, dollar for dollar, than high school graduates.

But today, the pay gap between high school and college graduates has never been wider.

According to Pew, in 1965, young college graduates earned $7,500 more than those with a high school diploma. By 2012, that gap had more than doubled to $17,500.

“Two things have happened to explain this gap,” Fry says. “College educated workers have gotten paid more and … the value of a high school degree has really been hammered.”

If it’s dead (or at least dying) what’s keeping the anti-college debate alive?

So long as the majority of employers value college education, there is no way anti-college activists can win this debate.

“Employers see something in these college graduates, something that they want,” says Fry. “We’ve got more college graduates than ever today but the pay, what employers are willing to pay them, has been rising over time.”

But that's not to say proponents of alternative education models aren't racking up small victories of their own these days. College dropouts are a ubiquitous presence on lists of (exceedingly rare) billionaire entrepreneurs — including Steve Jobs, Mark Zuckerberg, Tumblr founder David Karp and Whole Foods founder John Mackey.

Dale Stevens, 22, founder of UnCollege.org, has mastered the "unschooled"  approach to learning. He dropped out of college in Conway, Ark., shortly after enrolling, disenchanted with the lecture- and schedule-driven environment.

“The question I ask is, if so much of the experience of going to college is being in a semi-structured environment in a community of people where you’re pushed to do things that are challenging, why not just buy every 18-year-old a one-way ticket to India for a couple years?” he says. “That seems like a much cheaper way to solve that problem.”

Stevens is one of only a few dozen young people to so far earn the coveted Thiel fellowship, launched in 2011 by Peter Thiel, Facebook (FB) investor and co-founder of PayPal, and Elon Musk, currently CEO of Tesla (TSLA) and SpaceX. As a Thiel fellow, Stevens was granted $100,000 and the chance to skip college in order to pursue his own business venture. The premise for the program is that young people can be just as successful — and sometimes even more so — without a college degree.  So far Thiel fellows have created everything from sprayable caffeine to Spot, a car service that works like AirBnB.

"I don't want to sound like we’re dogmatically against college — it’s this amazing thing that civilization has constructed," says Jonathan Cain, president of the Thiel Foundation. "But what we do take issue with is treating it as if we just send more people to college, somehow we’ll end up creating jobs and improving our economy and getting back on track."

Stevens has taken a page from Thiel's book and created his own program for high school graduates looking for an alternative to college education. For $14,000 a year, he offers them housing and classes in public speaking, business management, negotiating, and writing professional e-mails. A $2,000 chunk of tuition goes toward funding an international trip the student can plan on their own, and a rotating roster of successful entrepreneurs act as mentors. 

Says Stevens, "We try and work on teaching the kinds of skills you’re supposed to learn but no one teaches you [in college]."

At the end of the day, the student alone will pick his or her own path to success — whether that means frat parties and finals or taking their talent off the beaten path. But the numbers aren't lying and, at this point, having a college degree seems to be the winning option for the majority of Americans.

 Read More:

Suze Orman's new credits core idea won't hold water

5 ways you've been saving money wrong

Why you're better off graduating in a recession

Rates

View Comments (643)

Recommended for You

  • Tycoon buys 30 Rolls-Royces for Macau hotel

    A Hong Kong tycoon has placed the biggest ever order for Rolls-Royce cars, agreeing to buy 30 Phantoms to chauffeur guests at a luxury resort he's building in the global gambling capital of Macau. Stephen Hung's $20 million purchase surpasses the 14 Phantoms bought by Hong Kong's Peninsula Hotel in…

    Associated Press
  • 1 Tip To Lose Belly Fat

    It's Hollywood's Hottest Diet And Gets Rid Of Stubborn Fat Areas Like Nothing Else.

    AdChoicesagoodcooksSponsored
  • Tycoon's arrest sends shock wave through Russia

    Tycoon's arrest sends shock wave through Russia MOSCOW (AP) — The arrest of a Russian telecoms and oil tycoon has sent shock waves through the country's business community, with some fearing a return to the dark days of a decade ago, when the Kremlin asserted its power by imprisoning the country's…

    Associated Press
  • Before You Buy Alibaba, Check Out 4 Top China Stocks

    Before You Buy Alibaba, Check Out 4 Top China Stocks While investors gear up for Alibaba Group 's (BABA) hotly anticipated initial public offering, don't forget about other Chinese stocks that are worth keeping an eye on. Today's Young Guns Screen of

    Investor's Business Daily
  • Costco Stores in Canada to Stop Taking American Express

    “The credit card relationship between American Express and Costco Wholesale Canada will not be renewed when it expires” on Dec. 31, the company said today in an e-mail to Canadian customers. The message was attributed to Lorelle Gilpin, vice president of marketing and membership for Costco…

    Bloomberg
  • As Fed takes baby steps, Cramer's trick for profit

    In turn, Cramer says making money in the market, involves looking at the environment through the lens of the Fed. "The trick is to remember that they speak for the common person," Cramer said. "The Fed wants the common person to make money." With that backdrop always in mind, Cramer says it becomes…

    CNBC
  • Play

    Citi, Bank of America Offer Discounted Mortgages

    Citigroup and Bank of America will offer mortgages at discounted interest rates to help borrowers with low incomes or subprime credit. AnnaMaria Andriotis joins MoneyBeat. Photo: Getty.

    WSJ Live
  • "The Retiree Next Door": How successful retirees stretch their savings

    "The Retiree Next Door": How successful retirees stretch their savingsBy the time she hit her late 40s, Toni Eugenia wasn’t sure she would ever be able to retire. Eugenia, 56, a pharmacy technician who lived in Houston, was nearly $200,000 in debt and

    Yahoo Finance
  • Norwich Information Security MS

    Online, accredited, top ranked. NSA Center of Academic Excellence. Recognized by the Department of Homeland Security. Download your free brochure!

    AdChoicesNorwich UniversitySponsored
  • CNBC Anchor Calls Out Fed-Hater Bill Fleckenstein In Startling Shouting Match

    CNBC Bill Fleckenstein of Fleckenstein Capital appeared on CNBC's Futures Now program on Tuesday. Futures Now host Jackie DeAngelis came out swinging, asking Fleckenstein right at the top if he was willing to admit that he had misunderstood monetary policy. Sounding taken aback, Fleckenstein…

    Business Insider
  • Beanie Babies creator's sentence debated in court

    Beanie Babies creator's sentence debated in court CHICAGO (AP) — Federal prosecutors seeking to put the billionaire creator of Beanie Babies in prison for hiding millions in Swiss bank accounts told appellate court judges Wednesday that the toymaker's sentence of probation threatens to erode the…

    Associated Press
  • Apple to unveil new iPads, operating system on Oct. 21 : report

    The company plans to unveil the sixth generation of its iPad and the third edition of the iPad mini, as well as its operating system OS X Yosemite, which has undergone a complete visual overhaul, the Internet news website said. Trudy Muller, a spokeswoman for Apple, declined to comment. The iPad is…

    Reuters
  • Margaritaville casino owners seek bankruptcy

    The owner of Biloxi's Margaritaville casino has filed for Chapter 11 bankruptcy protection Tuesday, only hours before a hearing where the landlord aimed to seize the property. The filing by MVB Holding LLC in U.S. Don Dornan, a lawyer for landlord Clay Point LLC, said the company had planned to ask…

    Associated Press
  • Embraer to sell 50 E-175 jets to Republic in $2.1 billion deal

    Brazil's Embraer SA, the world's third largest commercial planemaker, said on Wednesday it booked a firm order from U.S. The deal, which will be included in Embraer's order book for the third quarter, is valued at $2.1 billion, the planemaker said in a securities filing. The planes will be operated…

    Reuters
  • Gilead Stock Is Falling On These Drug Setbacks

    Gilead Stock Is Falling On These Drug Setbacks Gilead Sciences (GILD) shares are backsliding Wednesday on news that the patient drop-out rate for hepatitis C drug Sovaldi is quadruple that of clinical trials. In addition, the biotech's Phase 2 study results

    Investor's Business Daily
  • Best Womens Wrinkle Creams 2014

    Mom reveals simple wrinkle solution that has researchers very excited. Try this free solution today to look and feel years younger.

    AdChoicesBellaLabs.comSponsored
  • Here's What Mark Cuban Wishes He Knew About Money In His 20s

    Cuban is the owner of the Dallas Mavericks basketball team. Billionaire investor and entrepreneur Mark Cuban is generous with his advice. When we asked him what he wishes he'd known about money in his 20s, he said:

    Business Insider
  • SHOE COMPANY: Our CEO Just Disappeared And Most Of The Money Is Gone

    "and like that: he's gone." This is an actual headline from a company press release: "CEO and COO disappeared, most of the company's cash missing." (Via FastFT) In a statement, German-based shoe company Ultrasonic said its CFO,  Chi Kwong Clifford Chan, has been unable to reach the company's CEO,…

    Business Insider
  • Play

    What the Fed Meeting Means for Bonds

    Janet Yellen & Co. are expected to hint at their timetable for raising interest rates. Here's how investors should prepare ahead of the meeting.

    WSJ Live
  • 10 rock-solid stocks for conservative investors

    10 rock-solid stocks for conservative investors Shares with low volatility can beat their indexes with less risk Bloomberg News/Landov U.S. Bancorp is the cheapest S&P 500 stock

    MarketWatch
  • Billionaire Investor Says Chinese People Work Harder And Western Companies Could Face Deep Trouble After Alibaba IPO

    Michael Moritz, the chairman of VC firm Sequoia Capital, is a huge fan of Chinese internet companies and reiterated his enthusiasm for the Chinese market in an interview with The Wall Street Journal Wednesday. The billionaire investor described the Alibaba IPO as a “major landmark event” that is as…

    Business Insider
  • Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More

    Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More Stocks were firm on Wednesday morning ahead of the FOMC meeting outcome. Tuesday’s rally may have sparked higher interest again, and investors are looking for bargains

    24/7 Wall St.
  • Tired of Living Paycheck to Paycheck?

    New website reveals how to save $1,000's when you're living paycheck to paycheck. See exactly how.

    AdChoices Media ForceSponsored
  • 6 Things Debt Collectors Wish You Knew

    The work debt collectors do is not popular, and has become increasingly derided by those who don’t like what we do or simply don’t know the facts about debt collection. Too often, debt collection is painted with a broad brush to create a portrait that isn’t accurate, and doesn’t properly educate…

    Credit.com