Students are paying more and taking on more loans than ever for a college degree that might not mean a good paycheck, or even a job, at the end of four years, experts say.
“It’s important for students to understand that just checking the box that says ‘yes, I have a college degree’ doesn’t necessarily mean economic prosperity,” said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas.
Nearly half — 45% — of all students at the University of Arkansas in Fayetteville have major debt to repay upon graduation, according to university records. The average amount of debt for recent graduates at the state’s flagship university is about $23,111, very similar to the national average, and up from about $19,000 just three years earlier.
While some education experts say a degree — even with thousands in loans — is worth it, many students are finding their chosen fields don’t garner the expected pay or even a job.
Only 48% of all UA recent graduates surveyed for the 2010-2011 school year reported they had found employment. The school reporting the worst employment placement rate upon graduation is Dale Bumpers College of Agriculture, Food and Life Sciences at 23% employment placement. That school had 1,554 undergraduate students in fall 2011, according to UA’s Office of Institutional Research.
The university’s largest school — the J. William Fulbright College of Arts and Sciences — had 7, 504 undergraduate students during the same time period. Employment placement among recent graduates students surveyed from the school is 45%.
Students planning to graduate are having trouble finding employment before they graduate when previously jobs were available before they actually got their degrees, said Michael Miller, assistant dean of academic affairs at the College of Education and Health Professions.
At the same time, Arkansas’ wages are declining. The state’s median household income peaked in 2007 at $40,795 and has declined steadily since to $37,888 in 2009, the last year available from the state’s workforce services department. The state doesn’t break down figures by wages for those with college degrees or by degree type, a spokeswoman said, but Deck said Arkansas follows the national trend.
Nationally, the median income for a student with a high school diploma and no college is about $23,986 compared to $41,485 that a bachelor’s degree holder earns. That means, at least statistically, a college degree equals better pay, Deck said.
“Based on the data, education is the key investment over their lifetime,” Deck said.
WORTH THE RISK
People with a college degree earn about $650,000 more over their work life than those without the degree, according to the Pew Research Center.
So far, college debt isn’t burdensome enough to make a college degree valueless, Miller said.
“A college education is still one of the best investments you can make,” Miller said.
Students must agree given the rising number of college freshman.
At the UA last fall, incoming, degree-seeking freshmen numbers jumped by about 16.7% over 2010. The year before that, the university reported part-time and full-time freshmen numbers grew 30.5% from 2009.
The growth was so fast that the university had trouble finding housing on campus for students and started a waiting list for upperclassmen who wanted to live on campus.
Alongside the rush to go to college, universities everywhere are raising the price tag. Earlier this year, the UA increased its tuition by 5.3% over 2011. Last year, tuition increased by 6% above 2010. Since the fall of 2008 the cost has risen 18.03%.
Average in-state tuition at UA Fayetteville will be about $7,554 for this school year, not including books, supplies, lab fees and personal expenses, according to the university’s website.
Nationally, tuition for public and private institutions has “roughly tripled since 1980 in inflation-adjusted dollars,” according to two Pew Research surveys.
The college tuition rate increases, in Arkansas at least, would not have grown so quickly if the state would pay more toward higher education, said Shane Broadway, interim director of the state’s higher education department.
But state funding has remained basically flat for years and isn’t likely to go up significantly any time soon, Broadway said. When considering inflation, public universities are being paid less by the state, he said.
As costs like health care and critical maintenance mount, universities statewide are relying more and more on students to shoulder the cost of going to school.
Across the state, the top five schools in the UA system each have seen double-digit tuition and fee increases over the past five years. Those increases range from 17.98% in Pine Bluff, to 23.26% in Fort Smith and a 20.86% hike in Monticello. The cost to attend UA Little Rock has jumped 20.86% in the last five year period, according to school officials.
FOLLOW THE JOBS
Thanks to the worst recession in decades, jobs that were plentiful just a few years ago have dried up or cut wages, Deck said. For example, architects could easily find work during the building craze, but those days are over, she said.
Students with other skill-specific degrees, such as in journalism or fashion, are having trouble finding jobs in their fields of study or finding jobs with adequate pay, according to Deck.
Josh Clemence, UA architecture graduate from 2009, was forced to find work in another field when his corporate job evaporated within a few months. Clemence used his tech-savvy skills and began networking with others in the local start-up community before he landed a full-time social marketing job at Acumen Brands in Fayetteville.
Miller said students also find they have to move out of the state, or to a different region in Arkansas, to find work. Northwest Arkansas, for example, is “flush” with teachers, so a new graduate looking to enter the teaching profession might have to go to the Delta to find work, he said.
“Students need to understand that moving to the opportunity is required,” Deck said. “I think people have to search out opportunity.”
PROCESS IS IMPORTANT
The point is, Deck said, a college degree doesn’t guarantee quality of life. A college degree doesn’t mean better pay for everyone, she said.
“Sometimes we look at a college education and say ‘A college education is necessary to have a prosperous life,’ but it’s not enough,” Deck said.
The field in which a student earns a degree, and the choices the student makes while in school matter, Broadway said. But college isn’t for everybody, Broadway admitted.
“Personally, for my own life, I shudder to think where I’d be without a college education,” Broadway said.
Clemence said even though his architecture career didn’t pan out, he doesn’t regret his majoring in that discipline.
“It provided a foundation hard to match by other degrees, from discipline to critical thinking, to execution and perspective, to work ethic and it’s so applicable to who I am today,” he said.
Relevancy may sometimes be just as important as geography.
“I applaud anybody who is trying to create more relevant models for education that really matters,” said Glen Fenter, a native of Charleston, Ark., and now president of West Memphis-based Mid-South Community College.
Fenter made the comment during a recent interview about a new degree program at Arkansas Tech University-Ozark Campus designed to provide students with more options with respect to higher education.
The new associate of general studies degree allows student advisors to work with existing and new students “to tailor their coursework to meet industry needs,” and also prep for a move into a four-year degree, according to ATU-Ozark.
ATU-Ozarks officials said the degree should be more “relevant” in a Fort Smith metro area plagued with persistently high jobless numbers.
Fenter has long been an advocate of a “system loop” that provides flexibility for people to move between a job and the academic world.
“Workforces and businesses out there are demanding more than just the traditional academic models. … The world doesn’t look like it did more than 20 years ago,” Fenter said, adding that relevant degrees and flexible degree programs “are important to to moving the state’s economy forward.”
Fenter said a technical certificate in the right area — geographically and by occupation — may generate as much as 80% of the salary level as a bachelor’s degree.
“Arkansas is the last place you should try to ration education” by only supporting bachelor’s degree studies and programs, Fenter explained.