A Labor Department report released this week finds that the share of young people enrolled in college by the October after they graduate from high school has tumbled in the past few years. From a high of 70.1 percent in 2009, it was down to 65.9 percent in 2013. Other reports have found similar declines in enrollment for the entire universe of college students, not just those coming directly out of high school.
No doubt many pundits will celebrate this news. The previous swells in postsecondary enrollment, driven partly by the lackluster job market, brought frequent calls of a “college bubble.” Just as the government subsidized too much homeownership, the argument goes, it’s also been subsidizing too much higher education.
After all, freshmen land on college campuses bright-eyed and bushy-tailed, expecting to enrich their minds and, eventually (post-degree), their bank accounts.
Instead, they graduate financially crippled by loan debts. Many can’t find jobs, or they find jobs that don’t require a bachelor’s degree.
But here’s why college is still worth it, and still worth subsidizing.
Even though unemployment rates for young college grads seem high — especially in the first few months after graduation — they’re still much lower than they are for people without degrees. According to Labor Department data, the unemployment rate for Americans ages 20 to 29 who have a bachelor’s degree was 5.8 percent in 2013. In that same age group, among people with no education beyond a high school diploma, it was 14 percent.
And for those who do find work, the wage premium for higher education has grown over time. In 1979, among full-time workers of all ages, the median college graduate earned 38 percent more than did the median high school graduate; today the college-educated worker earns about 82 percent more. College is, as the Hamilton Project has pointed out, one of the best possible investments you can make, outperforming stocks, gold, long-term Treasurys, AAA corporate bonds and housing. That’s true for both a four-year degree and even more so for an associate’s degree.