Q&A of the Day – How Valuable is Attending College but Not Graduating?
Each day I feature a listener question sent by one of these methods.
Email: brianmudd@iheartmedia.com
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Today’s Entry: Hi Brian, love the show! Question for you. We always hear that those who earn college degrees earn much more than those who don’t. What I’ve never heard or read is what about those who start college but don’t finish with a degree. The reason I’m asking is because my daughter who is a junior at FAU has a great job opportunity she’s considering. To make it work she’d likely have to either dropout or at a minimum take courses much more slowly from here. I know that there are no absolutes, but I’d like to know what the averages suggest. Thanks, I’ll listen for a response!
Bottom Line: In answering this question there are a couple of different ways to tackle it. One of the most effectual is to simply see how many jobs require degrees. One of the many pandemic related trends of what became known as “The Great Resignation”, which has largely abated, is that many employers lowered education requirements for positions that didn’t, and don’t, really require a degree. It had become common that many employers, as part of a screening process to limit applications they’d choose to review, would arbitrarily require degrees. While “The Great Resignation” is over, with employees far less likely to job hop than they had been in the prior couple of years (since July turnover rates have dropped to pre-pandemic levels), unemployment rates remain low, especially in Florida, and many employers have left the lower education requirement in place for recruitment purposes. Perhaps this is even impacting the opportunity that’s being presented to your daughter. So, about the number of jobs that require a degree.
According to Georgetown University Research...
- 36% of jobs don’t require any degree
- 30% require some college and/or an associate degree
- About 35% require a four-year degree or more
Essentially what we have is an economy that’s currently operating in thirds. About a third of career paths don’t require any college education. About another third of career paths open with at least some college education. And close to another third of career opportunities present themselves to those with a minimum of a four-year degree. What that illustrates is that there is, in general, a potentially significant benefit to some college education even if it doesn’t result in a degree. On that note... According to a Federal Reserve study only about 27% of people work in a direct field related to their specific degree. Only about 40% of people work in a field loosely related to their degree. This has resulted in education that might either be mismatched for their eventual career and/or potentially unnecessary at the level it was obtained. For those reasons, if for example your daughter is being presented with the opportunity she would want if she were to graduate anyway, it would be entirely sensible to take the opportunity that’s presented now as opposed to potentially passing it up to complete a degree that may not be required and for an opportunity that many not present itself again. I can speak from experience on that one. I was a dean’s list student on a full academic scholarship at the time I dropped out of college to further my radio career and to grow my business. It wasn’t an easy decision, and my guidance counselor thought I was nuts, but it was undoubtedly the right one. Being opportunistic can prove to be the far more effective path (just ask college dropouts Steve Jobs, Bill Gates, Michael Dell and Mark Zuckerberg to name a few). As to the question of earnings for some college as opposed to none. The Pew Research Center conducted a study on median adjusted household incomes with a head of household at all educational levels. Here were the results:
Median annual incomes:
- High school or less: $49,900
- Some college: $67,000
- Bachelor’s degree (or more): $99,600
What we see is an average income bump of 34% for those who start but don’t finish a college degree in comparison to those whose highest level of education was high school and another 49% bump on average for those who complete at least a four-year degree. This analysis acts as a potential counterweight to the previous consideration. If the objective is simply to play the averages as it pertains to overall earnings there’s no doubt that completing a four-year degree is the way to go. For that matter, statistically continuing with graduate degrees would also be the play. Of course, there are other considerations that can also come into play, for example, the opportunity cost/benefit of working in a full-time career field earlier than one would by remaining in college, in addition to the additional cost of college. But again, the averages are the averages. And this is why the best answer likely comes down to what your daughter really wants to do. If the opportunity she’s being presented with is consistent with her desired career path there’s a good chance that taking the job and figuring out how she wants to handle education going forward, if at all, makes the most sense for her. If it’s a good opportunity but isn’t necessarily what she wants to pursue long term, perhaps it’s not. One of the intangibles that belies the averages, including average career earnings based on one’s highest obtained level of education, is whether one is passionate about what they’re doing for a living. In virtually all industries, top performers are top performers because they’re doing what they want to be doing. And as it turns out that’s pretty rare.
A recent study showed that only 14% of full-time employed people consider their job to be a “great job” and that 52% of Americans are currently open to making a career change (with a total of about 70% who are currently open to a job change at a minimum). When I see information like that what I see is a combination of apathy and lost opportunity. Most people just aren’t doing what they want to be doing and there are very few who feel they’re exactly what they should be doing. And sure, there are those who’re driven to succeed even in that environment, however it’s always going to be more likely for a person to be able succeed and reach their potential when they’re doing what they want to do and are passionate about their work. My two cents would be to let that consideration drive the conversation and the decision.