Experts discuss whether college is still worth it

Higher education has historically been seen as the most reliable path to economic mobility. However, with uncertainty around student loan programs, high sticker prices, and growing distrust in institutions, Americans are increasingly questioning whether college is still worth it.

On December 7, 2023, the Center for Economic Security and Opportunity (CESO) hosted a virtual panel moderated by Sarah Reber, a CESO senior fellow, to discuss the value of higher education and returns to obtaining a college degree. Below are some key takeaways.

Attitudes toward higher education have shifted.

Paul Tough, a contributing writer at the New York Times Magazine where he has written about these trends, started the discussion off by summarizing changing attitudes toward higher education: Ten years ago, 74% of young adults agreed that higher education is very important, down to only 41% today. This shifting perspective is manifesting in declining college enrollment, explained Tough. The number of U.S. undergraduates has declined to 15.5 million from 18 million in 2010.

Tough attributed this trend to two primary causes. First, trust in institutions is falling, and higher education is no exception. This is particularly the case among conservative voters who perceive colleges as pushing a liberal political agenda. Second, people are worried about the financial risk associated with high college costs and low completion rates.

Research suggests that average returns to college are still high.

David Deming, Harvard University Professor of Political Economy, explained that after increasing for decades, the college wage premium—the difference in average earnings between college graduates and non-college graduates—has plateaued, but remains around 65%. That is, the average four-year college graduate earns about 65% more than the average high school graduate.

The panelists also discussed the cost of going to college, noting that financial aid is available for qualifying low-income students, though it is not always enough to make college affordable. Stephanie Cellini, George Washington University Professor of Public Policy and Economics, pointed out that while the average posted “sticker price” of college has been rising, the “net price”—what students pay after subtracting out financial assistance that doesn’t have to be repaid—is lower than the sticker price that receives so much attention. She notes that the average sticker price has actually been decreasing in recent years. (See a recent discussion of that trend here.) Still, Cellini emphasized that many students have to take out loans to afford college and then struggle to repay these loans.

Denisa Gándara, Assistant Professor of Educational Leadership and Policy at UT Austin, added that higher wages are not the only benefit of college attendance. For example, there is a growing body of evidence suggesting that college graduates have better physical and mental health. Society also benefits when people go to college; college graduates tend to be more civically engaged, reported Gándara.

Returns vary by institution.

Cellini said that some colleges, particularly for-profit institutions, are riskier than others. For-profit colleges are generally more expensive than non-profit or public alternatives and don’t increase earnings as much. As a result, students who attend for-profit institutions tend to have higher debt and are more likely to default on their student loans. Gándara expanded on this point, saying that for-profit institutions enroll a disproportionate number of low-income, veteran, and older students. This disparity means that it is often students from more disadvantaged backgrounds that attend schools with lower returns.

Starting but not completing college can make students financially worse off.

Tough pointed out that about 40% of students who start college don’t complete their degree. These students often end up in a worse financial position than their peers who chose not to attend college in the first place.

Deming agreed that completion is too low and suggested that lack of resources at many colleges is a major part of the problem. Student support services are particularly important. As Gándara mentioned, public and other less well-funded schools enroll more low-income students—exactly the types of students who could benefit more from stronger support systems.

Community colleges have limitations but can be an affordable alternative to four-year institutions. 

Panelists pointed out the value of community colleges, an oftentimes more affordable option than traditional four-year colleges. Students can start at community college and transfer to a four-year college. However, as Deming noted, transferring from community college to a four-year college is not necessarily a smooth process. Additionally, he added that short-term programs often lead to shorter-term benefits and fewer transferable skills. Both Deming and Cellini touched on potential benefits of “stacking” credentials, meaning using multiple educational programs such as vocational training and traditional degrees to build a more comprehensive skillset and knowledge base.

Where do we go from here?

The panelists described a number of approaches to increasing the returns to college and improving college completion rates. Cellini mentioned initiatives to hold schools accountable for their students’ outcomes. Both Cellini and Tough proposed efforts to make information about financial aid and college choices more easily accessible and digestible, though Tough argued that some policy discussions have over-emphasized helping individual students navigate a too-complex system at the expense of more systematic change that would make higher education fairer. Deming suggested expanding government subsidies to make college more affordable. The panelists agreed that community colleges require more funding.

So, is college still worth it?

The consensus among the panelists: College is worth it for most people, with some caveats. Institution type and area of study both impact the returns to college, as do academic preparation and risks associated with not completing a degree. “The system is not fair,” Tough added.

There are actions society can take to make college pay off for more people. “Our college institutions are in desperate need of reform,” concluded Deming. As reiterated throughout the panel, the U.S. college system disadvantages low-income students, often leaving them with substantial debt while providing insufficient support systems to help them succeed.