A generation ago, a college degree was the symbol of elite academic achievement and a lifetime of unbridled earnings potential. Higher education was only available to exceptional students and those with the financial backing of affluent parents. Those who couldn’t go to college had a plethora of other options ranging from trade schools to apprenticeships to jumping straight into the workforce. Fast forward to today, it is almost demanded that 17 and 18 year-olds pick a school and go for the promise of a better future and the loans will all be worth it. As we now have statistics to analyze, millions of postgrads are crippled with combined debt of more than $1.3 Trillion. That is trillion with a “T.” Most recent data from the undergraduate class of 2016 finds the average debt of a graduating student at $37,172 (Forbes). So, huge chunks of debt are being assumed so more college graduates can be created. From a high level, we all understand supply and demand: employers are being supplied with an ever-growing influx of available postgrad talent which means the demand (price) they are willing to pay is continuing to plummet. The other side of this coin: degrees are being handed out at the highest rate in history, skewing the relative value of a college degree lower with every grad cap that gets handed out.
So what does this mean? Millennials are strapping themselves to a debt burden that they can’t repay and, in the process, making the value of a college degree less valuable. Students go to college to make themselves more attractive to their future employer and strive for an advantage over their peers. But, if everyone else is getting a college degree and it’s almost expected, students have thousands in debt and no real competitive advantage to show for it. Moral of the story, why take on this debt when there are a myriad of other career options that don’t demand you conscript a bulk of your future earnings in interest payments?
As the Caddyshack quote goes: “The world needs ditch diggers, too.”