Two new studies offer emphatic answers to much-discussed questions about higher education: Yes, a college degree is worth it, but yes, it's the middle-class that's getting particularly squeezed with student debt in the pursuit of one.
Both studies make persuasive cases, though each could be misunderstood without important context.
The first, released last week by the Lumina Foundation and Georgetown University's Center on Education and the Workforce, seems to thoroughly demolish the idea that the Great Recession diminished the value of a college degree. Yes, recent college grads have struggled more than usual to find jobs matching their training. But overall, even as unemployment was rising past 10 percent, the authors found the economy actually added 200,000 jobs for workers with a bachelor's degree. Since the recovery began, it's created 2 million more.
Just as there wasn't really a recession, at least in terms of job creation, for those with college degrees, there hasn't been a recovery for those without them. Nearly 6 million high-school-only jobs have been lost since the downturn began, and they are still declining even in the recovery.
That recovery may well never come if you have no college at all (though people with some college have done reasonably well of late).
"This is the clearest information that we have seen to date about the advantage of having college-level skills in the employment market," said Lumina's president and CEO Jamie Merisotis. "Since the recovery started two years ago we've seen a real acceleration. The gap between those with a college credential and those without one is growing."
The unemployment rate for all four-year graduates is 4.5 percent. For recent graduates, it's 6.8 percent. For recent graduates trying to work with only a high school diploma, it's nearly 24 percent.
In construction and manufacturing, which accounted for two-thirds of all Great Recession job losses, virtually all of the hiring during the recovery has targeted people with bachelor's or at least associate's degrees. Despite the hit those industries took, there are now about as many jobs in them as before the recession overall. But there are 15 percent fewer jobs for those with only high school in manufacturing, and 25 percent fewer in construction.
Overall, the number of jobs for people with at least some college is growing at a healthy 4 percent annually. But the growth rate for high school-only jobs is zero and those jobs remain 10 percent below their pre-recession levels.
Still, there is another variable needed to answer the question, "Is college worth it?" That's the cost of college, and that has been rising rapidly.
On average, the answer is pretty clear: A degree is worth it, to the tune of $1.3 million in additional lifetime earnings, a very good return on even an expensive degree.
But, as Georgetown's Anthony Carnevale acknowledges, there's no such thing as a generic bachelor's degree. Where you study, and what you study, matter a lot.
"What people shouldn't take away from this is you can get any old BA or AA," Carnevale said. "They need to get past that. They need to think about which degree and what it will it do for them."
As many as one in five undergraduate degrees — for instance in counseling, at least for those who don't go on to get a master's — produce average earnings no greater than those of a high school graduate. Many types of AA degrees produce better average earnings than some bachelors. The research paints a powerful portrait of an economy where more education is better, but the kind of education matters too.
The second study, being presented Monday at the American Sociological Association's annual meeting in Denver, highlights the particular burden of growing student debt on middle-class families, who may be too well off to qualify for financial aid like Pell Grants that target students from the poorest families.
In the study, University of Wisconsin demographer Jason Houle finds students from middle-income families rack up more student loan debt on average than others: not only students from high-income families — no surprise — but also than those from low-income families.
About 40 percent of students left school with debt, and the average was about $22,000. But students from families earning between $40,000 and $59,000 were saddled with $6,000 more on average than peers from families earning less than $40,000. Students from the next tier — family income between $60,000 and $99,000 — had $4,000 more in debt than their lowest-income peers.
One reason is that federal grant aid targets the lowest-income students — roughly 90 percent who receive Pell Grants come from families earning under $50,000. Lower-income students may be also be more debt-averse, causing those who go to college to choose cheaper schools.
But the figures reinforce the struggles of families just above the bottom level to afford even the average public 4-year college, with tuition plus room and board (before factoring in financial aid) now running more than $17,000 per year.
"These kids, even though they have pursued the American dream, they're starting their careers with hugely unequal amounts of student loan debt," Houle said. "That could be the difference of a kid who can take an unpaid internship that would put their career on an upward trajectory."
The caveat with Houle's study is that he looked only at people who attended some college.
As Houle acknowledges, while those from low-income families who go to college may get out of school with less debt, poorer students are still less likely to go in the first place. If the Georgetown survey shows anything, it's that graduating with a moderate amount of student debt is still much better than not graduating.
So the lesson isn't necessarily that the lowest-income students are better off overall: Just 8 percent of those from families in the bottom income quartile (under about $36,000) have earned a bachelor's degree by age 24, compared to more than 82 percent from the top quartile (roughly $108,000).
But Houle's study does illustrate the serious bind of families above the very bottom (earning between roughly $36,000 and $65,000). Just 17 percent of those students earn a degree by 24, and they're racking up more debt in the process.