As the cost of college continues to rise, public discourse around higher education has sparked debate about whether the investment is worth it. Considering that college graduates’ salaries have been outpaced by the costs of a degree, it’s no wonder that consumer confidence has waned. Any other economic exchange would warrant such scrutiny, so it’s essential that we view college in market terms, not just as a social chevron.
But what is the economic exchange between higher ed and would-be students? Prior generations were indoctrinated with the belief that a college degree promised a “good job” and good-standing status in society. However, the democratization of technology has reduced barriers to entry and created new opportunities for budding entrepreneurs and savvy creators to subvert these traditional paths and still obtain similar benefits that would typically come with having a degree. Some even argue that these outcomes are more likely to be achieved without the debt that so many students must accrue to get the degree and realize its potential benefit.
If we view the economic value of college based solely on the direct outcomes of post-graduation performance, then perhaps we’re evaluating the investment based on incongruent objectives and misaligned time horizons. That is to say, my career-based decisions should be based on my career goals. As such, I should choose the best course of action to increase my likelihood of achieving them. For some, that might mean a college degree; for others, perhaps not.
If we only measure the value of college based on immediate value realization, then we likely ignore the long-term financial benefits that college provides, like the network. The social networks created and fostered through college provide economic opportunities that otherwise would not be available to non-members of the network. That’s a compelling premium for venture creators and job seekers looking for opportunities later in their careers. Not to mention, a college degree signals potential and pedigree that bodes confidence for both employers and investors in the long and short term. Like any investment, we must consider the time horizon for evaluating a college degree’s net present value.
While my estimation remains resolute: college is a worthy investment, I do think it requires a new calculus to decide if college is the right investment for the right person. To do so, we must factor in the “job to be done” for potential students and assess how well college measures up against it. To do so, we must also consider which school is best based on this calculus and what subject to study.