Last month, Goldman Sachs released a report suggesting that a college degree is getting so expensive that it might not be worth the money anymore, at least for those who can’t get into high-ranked schools:
Many students are better off not going to mediocre colleges — ones that rank in the bottom 25% of all universities — Goldman says in a new report. They earn less, on average, than high school graduates. Even those who attend mid-tier universities might want to reconsider. “The average return on going to college is falling,” Goldman researchers wrote. The bank is known for ruthlessly focusing on the bottom line. As the price tag of a college education goes up, it’s taking longer for the investment to pay off. Here’s what Goldman projects: — 2015 graduates won’t break even until age 31 — 2030 graduates won’t break even until age 33 — 2050 graduates won’t break even until age 37 The price tag for a year or study at a private college is now $43,921. Even in-state public universities now average close to $20,000 a year.
Goldman’s report goes on to predict a “major revolution … in higher education,” pointing to new learning technologies like Massive Open Online Courses, tutorial sites like Lynda.com, and major employers like Facebook and Google designing “de facto degree programs” to mold future employees to their specific needs. Manufacturing companies may be doing something similar.
We hear from a lot of manufacturing CHROs who are frustrated that they couldn’t find the skilled trade talent they needed. Many are thinking of developing their own apprenticeship programs to train high school graduates. The manufacturing organizations we spoke to said upskilling their own workforce also had a huge impact on engagement and retention: If you train employees and give them skills to be successful, they’re more likely to stay with your organization. Curiously, though demand for college degrees is shrinking in step with the declining ROI, the price keeps going up. In fact, the Washington Post’s Jeffrey Selingo observes, if current trends continue, college will be unaffordable for most Americans pretty soon:
Not only is the overall pool of high-school graduates shrinking, but so too is the number of college-going students able to pay ever-increasing tuition prices. And it’s not going to get any better in the coming decade. Of the 450 counties in the United States with significantly more younger children than older ones right now, all but 100 of them have median incomes below the national average, according to an analysis by the Chronicle of Higher Education. … Right now, whether high-school graduates go to college depends almost entirely on just one factor: how much money their parents make. Seven out of every 10 students who come from high-income families and score in the top quartile of standardized tests earn a bachelors degree, compared to just 4 of 10 students from low-income families with the same academic background, according to a new working paper published this month by the National Bureau of Economic Research.