A few years ago, Silicon Valley investor Peter Thiel launched the Thiel Fellowship, which offers ambitious young people $100,000 (no strings attached) to focus on self-education and entrepreneurship in lieu of college.
With that fellowship, Thiel contributed his own fuel to a long-simmering debate: Is college worth the time and expense? While dropping out of college worked out for a handful of tech entrepreneurs—Bill Gates, Mark Zuckerberg and Steve Jobs never obtained degrees—a new report from The New York Times suggests that, yes, college is worth it.
That report, based on an analysis of Labor Department statistics by the Economic Policy Institute, posits that Americans who graduated with a four-year college degree “made 98 percent more an hour on average in 2014 than people without a degree.” Moreover, that number represents a significant increase from the early 1980s, when four-year graduates made an average of 64 percent more.
“There is nothing inevitable about this trend,” the report continues. “If there were more college graduates than the economy needed, the pay gap would shrink. The gap’s recent growth is especially notable because it has come after a rise in the number of college graduates, partly because many people went back to school during the Great Recession.”
But as FiveThirtyEight points out, a distinction needs to be made between graduating from college and merely attending it. “Most of the benefits of college come from graduating, not enrolling,” that publication noted. “The wage premium for people with some college but no degree has been stagnant, even as debt levels have been rising. That means that people who start college but drop out may be worse off than people who never enrolled in the first place.”
And the dropout rates aren’t great, with FiveThirtyEight suggesting “less than 60 percent of full-time students” graduate within six years; the numbers are worse for part-time students. “The college decision may be ‘a no-brainer’ … but only for those reasonably confident they can finish with a degree.” (Vox disagrees with the Times article even more strenuously, arguing that more data is needed to make such sweeping conclusions.)
For many, then, college could prove a profitable choice—provided one actually graduates.
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