With the ever-changing landscape of the job market and the increasing costs of higher education, more and more individuals are beginning to question the value of a college degree. According to a recent study by the Indeed Hiring Lab, employer demand for college degrees is dropping, and a poll of 772 U.S. professionals with associate degrees or above found that Generation Z is the most doubtful about the value of their degree.
Among Generation Z respondents, 51% believe that their college degrees were a waste of money. This is a stark difference compared to only 20% of Baby Boomers who feel the same way. The traditional mindset that a college degree would lead to higher earnings has been challenged in recent years. The Federal Reserve Bank of San Francisco notes that while the wage difference between college and high school graduates had been rising from 1980 to 2010, the “college wage premium” has now plateaued.
One factor contributing to the skepticism around the value of a college degree is the rising cost of tuition. U.S. News estimates that tuition and fees at all colleges have increased by 32% to 45% over the past two decades, even after adjusting for inflation. This financial burden often follows individuals after graduation, with over half (52%) of respondents in the poll graduating with school debt. Millennials, in particular, have been hit hard, with 58% carrying student loans into their professions.
Furthermore, student debt can have lasting effects on career advancement. Nearly four in ten respondents (38%) stated that their school debt had delayed their career progression more than their degree itself. This situation has led to a negative perception of the value of a college education, with individuals with student debt (41%) more likely to believe that their degree was a waste of money compared to those without debt (31%).
Another contributing factor to the increasing skepticism around higher education is the mismatch between the skills acquired in college and the reality of the job market. While most college graduates acknowledge learning valuable skills, a growing number believe that they could perform their current roles without their degrees. In fact, 68% of Generation Z respondents in the poll stated that they could do their current jobs without their degrees, compared to 64% of Millennials, 55% of Generation X, and 49% of Baby Boomers.
The changing demands of the job market are also reflected in job postings. As of January 2024, 52% of job posts on Indeed no longer require formal schooling, up from 49% in 2019. This shift suggests that companies are beginning to see high school and college graduates as interchangeable. Despite this trend, 67% of survey respondents would be upset if their peers were able to obtain the same or similar positions without a degree.
This cognitive dissonance highlights the frustration many degree holders feel after investing time and money in their education, only to find their competitive advantage diminishing in the job market. The Federal Reserve Bank of New York reports that college graduates are entering a labour market with worse circumstances, eroding the pay advantage that made college so attractive to prior generations.
However, despite the challenges and doubts surrounding the value of a college degree, some individuals still see the merit of higher education. Syracuse University communications design graduate Nico Maggioli believes that his degree was worth it, primarily for the creative perspective it provided. His teachers focused on developing a designer’s mindset rather than technical skills, which he believes is valuable in an increasingly automated world.
As technology, especially AI, continues to reshape the workplace and learning, educational institutions must adapt. Francisco Marmolejo, Higher Teaching President and Education Advisor at Qatar Foundation, emphasizes the importance of teaching essential skills over technical competencies. He believes that schools should prioritize skills such as analytical thinking, teamwork, and critical thinking to prepare students for the future job market.
Overall, the shifting landscape of the job market, rising tuition costs, and changing demands of employers have led to a growing skepticism around the value of a college degree. Despite the challenges, some individuals still see the merit of higher education and believe that the skills acquired through their degrees are valuable in an evolving work environment. As the education system continues to adapt to technological advancements, the debate surrounding the ROI of a college education will likely persist.
