Why the Path to the American Dream May No Longer Start with a Traditional College Education
Pursuing a four-year degree leaves too many students drowning in debt and unprepared for the work world. Here, I explain why—and what we can do instead.
The U.S. has long been known as a nation where all, regardless of the circumstances we’re born into, can rise to prosperity. We are all free to get educated, land a good job, work hard, achieve financial security, buy a home, and maybe even retire someday. But is it really true? A recent MassMutual study, to cite one source, suggests one in three of us believe debt and a lack of savings have put the American Dream in danger.
The American Dream isn’t dead. However—and this is a big however—traditional college may no longer be the key to finding the good job necessary to fund it.
There are two huge problems with higher education. One, it’s now unaffordable for many families, who already struggle to cover the rising costs of basic necessities. And so young people take on crippling debt and hope they can pay it off later.
Two, they find they can’t pay it off later, and here’s why: College just isn’t preparing them to compete in today’s workforce. Many degrees have almost no market value. Employers are starting to realize that, at least in some cases, the best candidates are those who forgo college in favor of other options that frankly make a lot more sense.
Here are a few big reasons why college is no longer the best option for many:
- Having a degree no longer sets you apart from the crowd. A degree used to make you “different.” Now, though, having one is the norm, not the exception—so it no longer sets you apart from other applicants and is no longer a guarantee of employment at all.
- It certainly doesn’t guarantee a high income. Modern graduates face a notoriously tough job market, and many are unable to secure jobs in the field they studied. Even more concerning is that when you factor out vocation-granting degrees and those from elite institutions, degree holders rake in only nominally more total lifetime earnings than those without a degree.1, 2
- College is just too expensive for most students. The cost of a college education has ballooned to exorbitant levels and is only going to go higher and higher. Over the past 30 years, college tuition has grown at double the rate of inflation.3 As a result of this sharp increase, most families have no way to afford to send students to college without going into debt.
- The days of “just work your way through” are gone. College students in the 1970s could cover their bill with a part-time summer job, working an estimated 182 hours at minimum wage. In contrast, that same student in 2013 would have to work an estimated 991 hours at minimum wage (a full-time job for more than half the year) to pay for their education. Even if they are able to work this much, how could they possibly balance such a rigorous work schedule with the demands of their coursework?4
- Many students graduate without mastering the skills they need to thrive at work and in life. Colleges are good at imparting raw knowledge, but they’re not helping students master the skills employers are looking for in new hires. New York University researchers Richard Arum and Josipa Roksa found that 45 percent of students showed “exceedingly small or empirically nonexistent” gains in critical thinking, complex reasoning, and written communication during their first two years of college, and 36 percent showed no improvement over the entire four years of their education.5 Plus, since most non-vocational degree programs aren’t designed to make students more valuable to employers, most require extensive training to make them work-ready.
- A degree is no longer “table stakes” for getting a job. Progressive companies are starting to recognize that students who forgo college in favor of more targeted training can often be more valuable. As a result, many of them—including Google, Apple, and Bank of America—are dropping the degree requirement and looking for other ways candidates have honed their skills.
- There’s a high opportunity cost to those four years. Not only are you racking up debt to finance a degree that may not pay off well, you could be spending the next four years doing something to make yourself more employable. Even going straight into the workforce with a full-time minimum wage job is estimated to bring $54,000 in earnings over four years.6 This is in contrast to the average college student, who graduates with an average of $30,100 in debt.7
So if students don’t go the traditional college path, what should they do instead? I admit that there are no simple answers. But here are a few options they might consider:
- Go with a more progressive, cutting-edge option. For example, consider a hybrid program like the one offered by Minerva Schools at KGI or a program like Praxis, whose slogan is “The degree is dead. You need experience.”
- Think about what you want to do and go deeper into that field. For example, if you want to be a coder, attend a coding boot camp such as Turing, Lambda, or General Assembly.
- Even if you do want a four-year degree, start out with a community college. This way you at least get the first half of it at a much better price.
- Do free work to gain experience or look for internships and apprenticeships. You don’t need college to do this, and often the best positions must be found independently. To learn how to do this, look at Charlie Hoehn’s Recession-Proof Graduate. His suggestions work just as well in good economic times and for people who never went to college.
- Do a bit of college on the side. You might be worried about having the right keywords in your résumé for automated application tracking systems to read. A good “hack” might be to apply to college, be accepted, and maybe take a course or two—because most ATS systems can’t tell the difference between “graduated with a bachelor of arts from Acme University” and “pursuing a bachelor of arts from Acme University.”
Our higher education system is on the verge of disruption. Frontloading four years of college at the start of a career just doesn’t work. I predict that in the future, young people will take one or two years of foundational and niche-focused “last mile” education and follow it up with four more years of “just in time” training spread over the rest of their lives and careers.
The American Dream is not dead; it’s just that how people get there is shifting. The world has changed drastically over the past 30 years or so, and the education establishment must evolve along with it. In the meantime, there are other, smarter options for those who have the foresight and the courage to buck the system and pursue them.
- Taking Ivy League out of the equation. Goldman Sachs makes a case against paying for an average higher education in this 2015 CNN article: https://money.cnn.com/2015/12/09/news/economy/college-not-worth-it-goldman/
- STEM Jobs. The U.S. Department of Commerce stated in their 2017 Job Update that STEM workers earn more on average. Read the report at http://www.esa.doc.gov/sites/default/files/stem-jobs-2017-update.pdf
- Tuition growing at double the rate of inflation. Ryan Craig continues to flesh out the discrepancy between the cost and use of a degree in chapter 2 of College Disrupted.
- “991 hours just to cover tuition!” Also from College Disrupted by Ryan Craig.
- “Failing to develop higher-order cognitive skills.” In their 2011 book Academically Adrift, Arum and Roksa discuss how college students are failing to develop the higher-order cognitive skills that they need to succeed.
- Opportunity cost estimated at another $54,000. Also from College Disrupted by Ryan Craig.
- 7 in 10 students graduate with an average of $30,100 in debt. This is shown via 2017 statistics on the Complete College website. Learn more at https://completecollege.org/data-dashboard/
About the Author:
Danny Iny is the author of Leveraged Learning: How the Disruption of Education Helps Lifelong Learners and Experts with Something to Teach. He is a lifelong entrepreneur, best-selling author, and CEO of the online business education company Mirasee. Best known for his value-driven approach to business, his nine published books include Engagement from Scratch!, The Audience Revolution, and two editions of Teach and Grow Rich.
Danny’s work is followed by over 100,000 experts and professionals across various outreach channels (email, social media, blog, column on Inc.com, etc.), and over the course of 2015, 2016, and 2017, they’ve invested over $10 million toward training on the Leveraged Learning opportunity through his books and acclaimed courses, such as the Course Builder’s Laboratory.
For more information, please visit www.mirasee.com.
About the Book:
Leveraged Learning: How the Disruption of Education Helps Lifelong Learners and Experts with Something to Teach (Ideapress Publishing, October 2018, ISBN: 978-1-940-85869-2, $24.95) is available from major online booksellers.