Students and their parents view college as a “golden ticket” to a comfortable financial future. They don’t understand that college is a competition. 

For decades, college graduates enjoyed higher earnings and greater wealth than individuals who did not graduate from college. This circumstance came to be known as the “college premiums.” 

The college income premium is the extra income earned by a family whose head has a college degree over the income earned by an otherwise similar family whose head does not have a college degree. This premium remains positive but has declined for recent graduates. 

The college wealth premium, extra net worth, has declined even more noticeably, trending downward faster than the income premium due in part to the high cost of college and the increasing need for student loans. The college wealth premium of a terminal four-year bachelor’s degree is at a historic low. 

Though these premiums still exist, according to economic research published by the Federal Reserve Bank of St. Louis, the data suggests that college is failing many recent graduates as a financial investment. 

Here’s the short version of Forbes’s thoughts on what you should consider if you are thinking about going to college. 

What are your career goals? 

Does the school you’re eyeing offer a strong program in your area of interest? 

How much would you need to pay for tuition and other expenses? 

How much student loan debt will you incur? 

What starting salary are you likely to earn? 

Do you notice anything missing? I’ll give you a hint. The latest data on “college outcomes” was reported in the WSJ in April 2024. The study was done by the Burning Glass Institute and the Strada Education Foundation. 

When ten high school graduates matriculate: 

Four drop out, most by the end of the first year. 

Three graduate but find themselves underemployed, e.g. making lattes. 

Three graduate and score a well-paying, professional job. 

What we can conclude from this study is: 

College is a competition for the relatively limited number of “college” jobs available each year. 

Supply far exceeds Demand. 

Academic ability, your major, and your resume matters. 

Have you been told, “You can be whatever you want to be?” That’s a lie. The aptitudes of high school graduates vary widely. The advantage goes to students who have won the genetic lottery, high math and linguistic aptitudes. 

Forbes, and many others, fail to ask the one critical question, “Are you college material?” overlooking the fact that almost any high school graduate can find a college that will accept them, because most schools (92%) are not that selective. Today, W-A-Y too many high school graduates with modest academic ability opt for college. If you aren’t strong academically, college is unlikely to be worth it. 

I hope you are following me here. It is difficult to get an acceptable return on an investment in a college education. It is going to become more difficult. 

Artificial Intelligence (AI) has emerged as a transformative force in the labor market, reshaping the nature of work, job roles, and employment dynamics across various industries. As AI technologies continue to advance, the impact of AI on the labor market is multifaceted and complex. On one hand, AI has the potential to automate tasks, enhance decision-making processes, and create new job opportunities in fields such as data analytics, machine learning, and AI development. On the other hand, it raises concerns about job displacement, skill polarization, and ethics. 

AI is creating new opportunities and transforming existing roles. According to the World Economic Forum, AI and automation are predicted to contribute 69 million new jobs worldwide by 2028. These new roles will require skills in areas such as creative thinking, data analysis, machine learning, and AI development, highlighting the need for academic “firepower” and the importance of upskilling and reskilling programs. 

Notes 

The Federal Reserve Bank of New York has recently done a study of the wages of college graduates who only hold a bachelor’s degree. There were fourteen majors that had a mid-career (ages 35 to 45) median wage of at least $100,000 a year. Ten of those fourteen majors were STEM, Computer Science or some type of engineering. with Chemical Engineering topping the list at $133,000. The four non-STEM majors that came with the highest mid-career median wages were finance, economics, construction services, and business analytics. Many typical graduates with degrees such as Biology, Education, Communications, Theology, Criminal Justice, Hospitality, Psychology, Philosophy, Anthropology, Fine Arts, and History barely made enough money to justify the investment in time and money. 

If anyone asked for my advice on the subject of “college material,” I would say a high school GPA of at least 3.5. Statistically, at a minimum, that would give you a 72% chance of graduating college. In addition, I look for strong standard test scores, i.e. 80th percentile. (SAT=1240, ACT=25)