Critics have long warned of impending doom and gloom over the rising cost of student loan debt – proclaiming this to be the next financial bubble to burst. They question whether or not a college education is worth it, especially for those students that attend private institutions. It is true that the cost to attend college has nearly doubled since 1980, but it is just as important to mention the cost of not going to college.
The Boston Globe recently cited findings by the Pew Research Center that shows the value of a college education.
The article shows that Pew’s research found that the earnings gap between young adults with and without bachelor’s degrees has stretched to its widest level in nearly half a century. It’s a sign of the growing value of a college education despite rising tuition costs, according to an analysis of census that was released by Pew in February. Young adults with just a high school diploma earned 62 percent of the typical salary of college graduates. That’s down from 81 percent in 1965, the earliest year for which comparable data are available.
The analysis by the Pew Research Center shows the increasing economic difficulties for young adults who lack a bachelor’s degree in today’s economy that is polarized between high- and low-wage work. As a whole, high school graduates were more likely to live in poverty and be dissatisfied with their jobs, if not unemployed.
The Council of Independent Colleges, of which Illinois College is a member, has issued an update to a fact sheet on student debt and college costs that was originally issued in 2012. The CIC examines the myths about student finance and sets the facts straight. (Council of Independent Colleges, April 2014)
Myth – Many students owe more than $100,000 when they graduate.
Fact – In 2012 only four percent of all borrowers owed $100,000 or more in student debt. The average debt of someone receiving a bachelor’s degree at independent colleges and universities is $19,500.
Myth – High levels of student debt make independent colleges unaffordable. And, only wealthy families can afford independent colleges.
Fact – One quarter of students who graduated with a bachelor’s degree from a four-year independent college or university did not have any educational debt. For those who borrowed, the difference between the median debt levels for graduates of public versus independent institutions is only $4,375. Independent colleges enroll students of all economic backgrounds, not just the wealthy, at about the same percentages as public institutions for low- and middle-income students.
Myth – It is difficult to receive financial aid at independent colleges.
Fact – A larger proportion of students at independent colleges receive aid than do students at public institutions. Students enrolled at independent colleges are twice as likely to receive grants from their institution as students enrolled at public institutions, and more than three times as likely as students at for-profit institutions.
Myth – Students at public institutions get more financial aid than students at independent colleges and universities.
Fact – Students at independent colleges receive three times the amount of institutional aid as students at public institutions and five times as much as students at for-profit institutions. Independent colleges give students nearly six times as much institutional grant aid as does the federal government.
The CIC says that graduation rates at independent colleges are much higher than those at public and for-profit institutions, even for low-income students. Students at independent colleges graduate much sooner (about 10 months earlier) than do their peers at public institutions and 48 months earlier than students at for-profit institutions. This all means fewer years of paying tuition and a quicker start to earning a salary; and … graduates of independent colleges are far less likely to default on their student loans.
Long-term benefits of a college education
In an article by John Etchemendy, provost at Stanford University, published by The Washington Post in September 2013, he cites, “A recent Milken Institute study found that for each additional year of college attained by the residents of a region, the per capita gross domestic product of the region increases a remarkable 17.4 percent.” The author argues that the increased regional productivity is largely the result of the increased productivity of a college-educated workforce.