Are college degrees worth the debt and time?

Are college degrees really worth the effort? Is giving up four years (or more!) of your life all in the hopes of landing your dream job worth it? On top of that, many students end up in debt as well....

A November 2022 survey by ZipRecruiter collected by Bussiness Insider shows that 44% of respondents with college degrees regretted choosing their major, with English, communications, sociology, and marketing as the most regretted majors. So is college really not worth the pain?

A more recent survey (March 2023) published by The Wall Street Journal and conducted with the non-partisan research organization NORC at the University of Chicago shows that 56% of Americans believe earning a four-year degree is a "bad bet."

Despite the lack of faith, according to The Economist, the difference between the salaries of people who gain at least a bachelor’s degree and those who do not have kept increasing over the years. However, it has started to fall or stagnate in some countries, while tuition prices have only risen.

Still, The Economist continues, the average degree remains valuable. According to experts cited by the magazine, the typical rate of return for a bachelor’s degree is around 14%.

Information on which majors are more beneficial is also becoming more precise and available, despite a changing work market.

But college is not the only valuable choice. In the last five years, as the digital boom erupted, the needs of the hiring market have changed. Big companies are looking for different skill sets from their workers, which means reducing or eliminating some hiring requirements.

That change is especially true for the Tech Industry, which has dealt with talent shortages for years. These companies are responding to the problem by eliminating the four-year bachelor's degree requirement in medium or high-skilled positions.

A study by Harvard University reviewed over 51 million job postings from 2017 and between 2019 and 2021. The researchers concluded that 46% of middle-skill and 31% of high-skill occupations stopped requiring degrees between 2017 and 2019.

Researchers call this tendency "degree reset" and explain it reverses a trend "toward degree inflation in job postings going back to the Great Recession." The Harvard study also documented the effect of the Covid-19 pandemic on accelerating an ongoing change.

Harvard researchers claimed that "jobs do not require four-year college degrees. Employers do." That explains why dropping their requirement is a simple solution for companies experiencing labor shortages. Companies like Dell, IBM, Alphabet (Google), and Apple are good examples.

The gap between available positions and those seeking work in the Tech Industry is at an all-time high: 5 million unfilled jobs. According to the Job Openings and Labor Turnover Survey collected by CNBC, Tech companies opened 11.27 million positions in February 2022, whereas there was 6.27 million people reported as unemployed.

Some companies have responded to the labor shortages by restructuring their working force. That solution often implicates upskilling and reskilling employees. But training programs have also become good options as a hiring model for companies like Alphabet, where trainees can gain positions.

Apprenticeships have become a good way to assess skills and competencies instead of degrees. According to CNBC, the tech consulting firm Accenture has 1,200 people through training programs, and 80% did not have a four-year bachelor's degree. Nickle LaMoreaux, IBM's chief human resources officer, told the news outlet that 50% of job openings in the company do not require a four-year degree.

According to the search site Monster, a few tech high-paying jobs that do not require a college degree are Web Developer, Computer Programmer, System Analyst, Network Engineer, and Computer Support Specialist. The site claims that all these positions have salaries of over $50.000 a year.

In the tech world, cybersecurity is one of the most unfilled positions. According to CNBC, some estimates show that there are now more than 450,000 open cybersecurity jobs alone. Accenture and Dell have filled some cybersecurity positions through apprenticeship programs.

Image: Austin Distel / Unsplash

Monster also enlisted creative jobs as promising alternatives for those who do not have a four-year bachelor's degree. Careers in graphic design or digital marketing require a few soft skills and communication skills. Some employers look for degrees, but experience and portfolios are equally crucial for this kind of position.

Image: Glenn Carstens / Unsplash

One of the most interesting positions in Monster's list of jobs that do not require a degree is Aerospace Technician. According to the site, the work is increasingly computer-based, and vocational training or an associate degree is a common route in the field.

Large companies in other areas are also dropping the degree requirement. 75% of management positions in America's largest employer, Walmart, have been filled by workers that started their careers in hourly jobs.

"We don't require degrees for most of our jobs in the field and increasingly in the home office as well," Kathleen McLaughlin, Walmart executive vice president, said at an online event The Wall Street Journal collected.

The tendency is permeating in widely different sectors. The WSJ also said Delta had reduced its hiring requirements for pilot positions this year. On the other hand, CNBC reported that Penguin Random House, the most prominent editorial in the world, has also lowered educational requirements.

The public sector is also responding similarly to the labor shortage. Maryland's Governor Larry Hogan announced that his administration would eliminate the four-year college degree requirement from thousands of state jobs. The tactic has proven effective, with a 14% increase in hirings. Incoming Pennsylvania Governor Josh Shapiro campaigned on a similar initiative.

Hogan lifted the request for degrees as part of a program alongside Opportunity@Work, a nonprofit that wants to cut degree requirements. "Through the efforts we are launching today, we are ensuring that qualified, non-degree candidates are regularly being considered for these career-changing opportunities," he said in a press conference.

But these changes are only happening in some sectors. A report from the National Center for Education Statistics (NCES) on education status in the United States, collected by Forbes, shows that individuals with a college degree continue to enjoy better employment prospects and greater annual earnings.

Harvard researchers warn that a "cyclical reset" may reverse when conditions change, and employers would request degrees again. However, every year it is more evident that college is only one of many valuable options for students after high school.