3/29/2016 Don't Buy The Hype, College Education Is Not An Investment Forbes

http://www.forbes.com/sites/realspin/2013/06/12/dontbuythehypecollegeeducationisnotaninvestment/#
56b23f047ee6 1/11
JUN 12, 2013 @ 08:00 AM 41,087 VIEWS

Don't Buy The Hype, College Education Is Not An

Investment
Capital Flows
CONTRIBUTOR
Guest commentary curated by
Forbes Opinion.
FOLLOW ON FORBES (462)

By George Leef
Hardly a day goes by without compare average earnings of
the publication of articles on workers who have college
the plight of recent college degrees with average earnings
graduates. Large numbers are of workers who dont and
either unemployed or conclude that because the first
employed in jobs that dont group does significantly better,
call for any academic having gone to college was a
preparation. Many are good investment. The degrees
struggling with the burden of are regarded as causing the
their college loans. earnings premium.

In addition, the educational That analysis is extremely

value of college is misleading. The most glaring
questionable. In their book flaw is that it draws a
Academically Adrift, conclusion about future
sociologists Richard Arum and conditions (earnings that
Josipa Roksa concluded that people who go college now can
more than a third of recent expect) from data based on
college graduates had coasted earnings for college graduates
through without adding going decades back.
anything to their human Conditions today, both with
capital. Reports that regard to college academic
employers often find graduates rigor and the labor market, are
applying for jobs to be weak in much different than they were
basic skills are numerous. 40 years ago.

Nevertheless, higher education If a college degree were a

boosters continue to proclaim regulated investment
that college is undoubtedly opportunity, it would have to
worth it and still a good bear the standard warning that
investment. A recent study by past performance is no
the Public Policy Institute of guarantee of future performance. The future
California is a good example of wont
this sort of thinking. It be similar to the past for many
purports to show that earning college graduates and telling
a college degree remains a young people that college will
good investment. be a good investment is
careless and irresponsible.
The technique of this study In truth, going to college isnt
(and dozens like it) is to an investment at all.
When college cheerleaders say
that there is an earnings
premium for graduates, they
make it sound just like
investing in financial
instruments. Buy this bond
and you get interest payments
in return buy a college degree
and you get higher wages in
return.
But that isnt the case. No one
receives any payment or
premium merely for having
finished college. Employers do
not reward workers just for
having passed enough classes
to earn a degree. They reward
workers for their productivity.
Going to college might
increase a persons
productivity, but its neither
necessary nor sufficient for
that.
Lets consider three students
to make that point.
Student A was diligent in high
school and enrolls in college
with an excellent academic
foundation. He concentrates
on his work and substantially
raises his level of knowledge
and skill. After graduating, he
finds a good job in his major
field and continues to advance.
For him, college was worthwhile because it
helped augment his human capital.
Student B got through high
school with a minimum of
effort. He has little interest in
or aptitude for academic
pursuits, but still he enrolls in
a college many schools will
gladly accept weak and
disengaged students like him
because hes heard that getting
a degree will boost his
earnings. Thanks to grade
inflation and the watereddown
curriculum, he coasts
through college and obtains
his degree in some
undemanding field.
After graduating, the best job
he can find is working in a
game store. He has nothing to
show for his college years but a
piece of paper and lots of debt.
Student C was a good student
in high school, but instead of
enrolling in college, she earns
several badges and
certifications in things shes
interested in, such as
computer programming and
(her grandmothers native
language) Portuguese. She
assembles an online portfolio
with those and other material
showing what she can do.
Shortly after her 20th birthday,
shes offered a job by a
Brazilian importer that needed
a capable American
representative.
She is doing well without a
college degree because she
understood that youre not
rewarded for credentials, but
for capabilities.
College used to look like a
good investment because
earning a degree usually
entailed at least some serious
work and having done it set
the individual apart. Having
that degree was a competitive
advantage in landing a job, but
success always depended on
personal performance rather
than educational pedigree.
These days, with the labor
market saturated with college
graduates, the time and money
spent on college is often
wasted. What young
Americans should think is,
How can I raise my value and
demonstrate it? That might
best be done in college, like
Student A, or it might be done
elsewhere, like Student C.
College itself isnt an investment, just one
way of increasing your value.
Reading Questions
1. Whats the plight of recent college graduates?
2. What do employers think of the recent graduates applying for jobs?
3. What do the results of the study by Public Policy Institute of California show?
4. Whats the problem with that study, according to the author?
5. According to the author, is going to college a good investment?
6. Do employers reward workers for their degree or productivity?
7. What is human capital?
8. How are students A and C different from student B?
9. What question should college students consider?