Nowadays, the prolonged recession and subsequent shortage of jobs has led many to gripe about how bachelors degrees must not be as valuable as they used to be. Some even wonder if bachelors degrees are so common that they’ve become devalued, diluted, and now occupy the spot that was once reserved for high school diplomas. This griping is so loud and persistent that it can be hard to tell if bachelor’s degrees alone are really what they used to be or if they are worth the extra investment.

bachelors degreesThe answers to those questions are ‘no’ and ‘yes’.

According to the Bureau of Labor Statistics median salary figures, bachelor’s degree-holders still command $21,528 more per year on average than those with only high school diplomas. This might sound pretty clear-cut, but determining the value of your particular bachelor’s degree is far more complex than you might think.

Not As Elite As They Used to Be

A greater percentage of Americans hold bachelor’s degrees than ever before, more than triple what it was back in 1960. Increased availability of education, changing cultural attitudes, and an overall increase in wealth have had something to do with this. By taking a look at just how much the numbers have changed over the last century, it becomes easy to see how the value of a bachelor’s degree might not be what is used to be.

According to the National Center for Educational Statistics, in 1910, only 2.7 percent of Americans age 25 and older held a bachelor’s degree or higher. Ponder that for a minute. It’s almost impossible for us to imagine nowadays. Now imagine that only 13.5 percent of Americans had a high school diploma. That was the case a century ago. And it’s easy to see how very valuable a bachelor’s degree would be in that situation. Having bachelor’s degree meant you were elite. You had doors open to you that the other 97 percent of humanity didn’t. Perhaps this is the picture that most people have in their head when they picture how great things would be if they just had a bachelor’s degree.

Fast-forward to 1960, and you see that percentage rise steadily to 7.7 percent. As American wealth grows and job markets for higher paying jobs become more competitive, that number jumps up to 17 percent by 1980. By the year 2010, 29.9 percent of Americans have bachelor’s degree or higher. Suddenly, with over a quarter of us holding that diploma, a bachelor’s degree doesn’t seem so special anymore. It’s common enough that it seems like everyone has it, so where’s the advantage in having one?

But this would be just one very narrow-minded way to look at that 29.9 percent statistic. Yes, compared to 1910 figures, bachelor’s degrees aren’t nearly as special as they used to be. But taken by itself, that percentage means that only three out of every ten Americans above age 25 have a bachelor’s degree.

So in terms of uniqueness, bachelor’s degree still hold some clout over high school diplomas. To determine if that degree is any more valuable than a GED, you have to get a little more complicated.

In Return on Investment

College students spend tens of thousands of dollars to earn bachelor’s degrees. The final pricetag can be so alarming that many question if they will actually make back the money they spent. Naturally, if your bachelor’s degree fails to make back what you spent on it, it simply becomes a very expensive hobby.

bachelors degreesThe good news is, according to a recent BusinessWeek study of the educational costs and earnings of American college graduates over a 30-year period, bachelor’s degrees do produce a positive return on investment (ROI). How large that return is depends on what schools students attend, among other factors.

In the study, graduates of the Georgia Institute of Technology saw the biggest annualized net ROI at 14.2 percent. That means that Georgia Tech grads made back 14.2 percent of their investment every year for 30 years after their graduation.

Brigham Young University alumni saw 14.1 percent new annualized ROI. Harvard University grads were a tad lower at 12.5 percent, UNLV was 9.1. percent, and Black Hills State University claimed the lowest ROI in the study with 4.3 percent.

Keep in mind, this study looked at averages for each school. Actual bachelor’s degree ROI could differ wildly from student to student. When you consider individual graduates, there are a host of factors that can decide how much return each will see on their bachelor’s degree investment, including their major of choice, their school, and the job market.

It Depends on Major

bachelors degrees

Majors make a huge difference in how much a bachelor’s degree-holder can make over his associate’s degree- or high school diploma-holding peers. According to reports produced by CollegeMeasures.org, graduates of two-year technical degree programs in Texas out-earn bachelor’s degree-holders in the state by more than $11,000 in their first year out of college.

Similarly, in Colorado, students who earn two-year degrees in Applied Sciences are earning almost $7,000 more than graduates of bachelor’s degree programs across the state after one-year from graduation.

The same study found that among bachelor’s degree-holders first-year earnings vary wildly according to major. Fine and Studio Arts graduates make less than $30,000. Nursing graduates make more than $50,000.

The lesson here is that some majors pay you back faster than others. For some majors, earnings can be so low that you might not make a return at all. For other majors, like those in technology- and applied science-related fields, the returns can be fantastic.

It Depends on the School

As mentioned above, some schools tend to get students a better ROI than others. Why is that? Because each school is either strong or weak in its career services or its alumni networks. Some schools will have recruiters committed to come to campus every year to hire their best and brightest, while at other schools, students have to go out on their own to find opportunities. Even a certain school’s name on your resume can make all the difference when the hiring manager is deciding whether to call you back or not. Bottom line: the right school’s network can be worth its weight in gold.

The wrong school’s network? Well, you’re going to have to get resourceful.

bachelors degree

This difference is seen starkly between school’s that share the same metropolitan area. For example, University of Denver business graduates made over $59,000 in their first-year after school while their peers down the street at University of Colorado – Colorado Springs made roughly $39,000. That’s a $16,000 difference, even though they share the same metropolitan area. And this phenomenon isn’t native to Colorado.

If you compare first-year earnings for college grads in Virginia, you see that George Mason University students make an average of $41,153. That’s a big difference from their counterparts at Virginia State University who bring in only $28,820.

So what do these findings mean in a practical sense? They mean that not all bachelor’s degrees are equal. The school you choose for your bachelor’s degree program can make or break your investment. The wrong school can leave you with a bachelor’s degree that’s worth little more than the paper it’s printed on or the high school diploma you already have in your hand. The right school, however, can springboard you to success.

It Depends on the Job Market

Finally, especially in these times, if you’re trying to figure out if your bachelor’s degree will be worth your money and time, you always need to take into account the particular job market you live in. Unemployment and industries differ so much by state that what might be a great degree in one state might be a complete no-show in another.

bachelors degree north dakota

Take the vast differences in unemployment between states, which is always a good measure of the health of each state’s job market. In North Dakota, particularly because of an oil drilling boom, unemployment sits at a very low 3.3 percent, according to Bureau of Labor Statistics numbers. Hawaii is also pretty comfortable at 4.9 percent. In higher territory, Alabama, Colorado, and Maine all have 6.9 percent unemployment, whereas Nevada is the worst in the nation with 9.6 percent.

On top of unemployment, each state specializes in certain industries and might be weak in others. States like Michigan and Ohio are strong on manufacturing but not so much on Technology or Tourism. California, Utah, Texas, and New York have become huge tech centers. Knowing what your state specializes in can help you determine the value of your degree where you live.

Of course, if your state isn’t a good fit for your bachelor’s degree, you always have the option of moving to greener pastures, but this can be risky and costly.

Is More Education the Answer?

So if bachelor’s degrees have lost some of their potency in the American job market, if the bachelor’s degree has become what the high school diploma used to be, is the answer to get a master’s degree? Is the master’s degree the new bachelor’s degree?

bachelors degrees masters degreesYou could make this case by looking at NCES numbers. According to 2011 figures, for roughly 31 percent of American adults, a high school diploma is as far as they’ve gone, compared to 9 percent who’ve gone as far as an associate’s degree, and 19.5 percent who’ve gone as far as a bachelor’s degree. But master’s degrees really narrow the playing field with only 8 percent of American adults going that extra mile, and even fewer (1.5 percent) going as far as to earn a professional degree.

In practical terms, the farther you go beyond a bachelor’s degree the more elite you become. So in that sense, master’s and professional degrees could be considered the new bachelor’s degree.

It’s Complicated

Obviously, when it comes to the question of the value of a bachelor’s degree, there are a lot of factors to take into account. The value of your bachelor’s degree will depend on the major you choose, where you live, what school you attend, and, most importantly, how well you perform in your career. Having said that, despite all of this, with the exception of a few majors that really struggle, bachelor’s degree are still a very good investment that high school diplomas just can’t compete with.

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Sources:
http://nces.ed.gov/programs/digest/d11/tables/dt11_008.asp
http://collegemeasures.org/category/Reports.aspx
http://nces.ed.gov/programs/digest/d11/tables/dt11_009.asp
http://www.businessweek.com/interactive_reports/bs_collegeROI_0621.html

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