The new college value calculation (NACAC Journal)

The confusing college payoff conversation

One of the most popular college conversations today has a couple of stages: first a discussion about those unsubstantiated estimates of its the dollars-and-cents value, and then a review of the “experience”.

These chats – with everyone from your counselor or advice-spewing uncle to the recently-graduated neighbor working at the local coffee shop or shoe store – perhaps first  review the data about the financial value of college then always touch on how it enhances one’s life.

And right in the middle of those discussions now is a new book by University of Pennsylvania business management professor Peter Cappelli, who suggests we should take a long, hard look at the financial payoff of college and perhaps trumpet its other benefits. (Will College Pay Off?: A Guide to the Most Important Financial Decision You’ll Ever Make.)

Cappelli should know – he heads the department that teaches human resources to top business students at the respected Wharton School.

In his book, he carefully reviews the many opinions about whether college pays for itself, which today seem to suggest it isn’t a great financial investment. He derides “unqualified statements about the big payoff to a college degree that are pushing so many students and their families who can’t afford it to jump into the deep end of college expenses, taking on debt that they cannot afford for experiences that are unlikely to pay off.”

That well-meaning push, experts say, has meant some people who can’t afford school attend, some who might be interested in another path feel compelled to enroll, while, meanwhile, colleges create programs to handle the load and new, often less-beneficial for-profit colleges proliferate. Even more-specialized majors also grow, Cappelli argues, though those degrees may be less marketable and more difficult to shift from – “career paths” like adventure education, artic engineering or auctioneering, just to name the first three at a site championing them.

Such narrow choices also add stress to 18-year-olds who sometimes have had little time to explore careers or have much real-world experience beyond scooping ice cream or taking fast-food orders for a few months.

Cappelli also clearly notes that careers that are popular and promise to offer jobs at one point may not be as promising in four years because the economy shifts and because there are a glut of grads flooding that field simply because of the chatter about it. Some “STEM” jobs, he notes, which are still widely ballyhooed, are very hard to find and, in one example, even pay less than jobs in social services. Only one-in-five science grads got a job in their field in 2009, he says.

He and other suggest that in the past a college degree was, for better or worse, a sort of filter which indicated that the graduate had shown him or herself capable of handling the rigor of college.  Now, he says, that’s not the case for a number of reasons – and while employers still look at the “prestige” of some schools, they’re often most concerned about work experience.

“It has to do with internships and summer jobs and extra-curricular activities. That’s what they care more about than the academic material,” he says.

Cappelli, of course, doesn’t suggest we shouldn’t go to college – just that prospective students should take their time and make careful, practical choices related to college selection, their major and the job market. He says a year of service or a gap year or a year off working could be a good idea. “It is important to find it whether a student is ready for college before they go, and taking a year off to do something independent is a good way to do that.”

And, he says, young people should think about the real value of the degree – that other “experience”.

“There is no guarantee of a payoff from very practical, work-based degree, yet that is all those degrees promise. Liberal arts…will enrich your life and provide lessons that extend beyond any individual job. There are centuries of experience providing support for that notion.”

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