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The College Decision: Some weigh higher ed ROI in economy with plenty of jobs

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Members of Generation Z – those born between the mid-to-late 1990s and the early 2010s – are more likely than previous generations to go to college, according to Pew Research Center, but is a college degree needed if a career field doesn’t require it?

In news reports, stories of climbing tuition and burdensome student loan debt abound. Meanwhile, the Springfield metropolitan statistical area has a 2.1% unemployment rate as “Help Wanted” notices pop up like dandelions throughout the region.

Savvy students and their parents may question whether college offers a sufficient return on their investment, or whether they might be better off pursuing alternative approaches to skilling up for the world of work.

Return on investment
The benefits of education are hard to quantify, but its value is partly mathematical. In the business mind, it starts with a question: To what extent are future earnings impacted by college experience?

A 2022 Georgetown University study, “Ranking 4,500 Colleges by ROI,” reported 60% of college students across institutions earn more than a high school graduate after six years; however, at 30% of postsecondary institutions, more than half of their students six years after enrollment earn less than a high school graduate.

In 2022, the U.S. Bureau of Labor Statistics reported workers 25 and up without a high school diploma had median weekly earnings of $682. A worker with an associate degree earned $1,005 weekly; bachelor’s, $1,432; master’s, $1,661; and doctorate, $2,083.

The Georgetown study offers ROI assessments for 4,500 colleges and universities, and it shows the share of students whose earnings after their enrollment at the university is higher than those workers with a high school diploma as their highest level of education.

The study offered the following stats on area institutions, in descending order of ROI:

  • Missouri State University’s share of students earning more than high school graduates 10 years after enrolling is 75%. Median 10-year earnings for these students are $45,589.
  • Evangel University’s share is 68%, with median 10-year earnings of $42,793.
  • Drury University’s share is 63%, with median 10-year earnings of $37,543.
  • Ozarks Technical Community College has a share of 56%, with median 10-year earnings of $34,060.

According to CollegeBoard data, average tuition and fees for full-time students in 2022-23 were $10,950 per year for public four-year in-state schools, 1.8% higher than the previous year before adjusting for inflation, and $28,240 per year for public four-year out-of-state schools, up 2.2% from the year before. Private nonprofit four-year education is $39,400 per year, on average, which is up 3.5%.

In Springfield, MSU raised its tuition by 3.89% for the 2022-23 school year, and a 4.9% increase is in place for 2023-24. OTC announced a rate increase of 4.9% for 2023-24, following a 7% increase for 2022-23.

Generation at a crossroads
Gen Z seems more disposed toward education than the preceding generations. A study by the Annie E. Casey Foundation found the share of 16- to 19-year-olds who were neither high school students nor graduates fell from 11% to 4% from 2000 to 2019. At the same time, the share of 18- to 24-year-olds who were college students or graduates jumped from 36% to 49%.

Meanwhile, Americans have $1.75 trillion in total student loan debt, according to the U.S. Federal Reserve – $28,950 per borrower, on average.

The AEC Foundation reports 44% of Gen Z members ages 7-17 lived with a parent with a college degree, compared with 33% of millennials when they were at the same age.

For the most part, Gen Z is the generation that is faced with the decision of whether college is the best route for them, and more than any generation before them, they have been exposed to models of people who have traveled that road.

The why
“Right now, there’s a hot labor market,” said Mark Miller, chief media relations officer for OTC. “I understand the siren song of $15, $18, $20 an hour if you just got out of high school.”

But the labor market may not always be so hot, according to Miller.

“If the labor market cools off or you don’t want to do that kind of work anymore – or your body breaks down, or you aggregate responsibilities, like a spouse, children, a mortgage – you may want more,” he said. “Your options are limited with only a high school diploma.”

There are plenty of models of post-high school education, Miller noted.

“Some kind of training beyond high school is going to become more essential to have a good job,” he said.

Shawn Wahl, dean of the MSU College of Arts and Letters, noted there are many models for a college experience, but the traditional on-campus experience has intrinsic value.

“Regardless of the type of institution, the traditional college campus experience offers chances for students to make friends and connections that will shape the rest of their lives,” he said.

He added that a campus experience provides students with a chance to explore their options and discover their purpose – which may be in a field they never considered or even heard of before.

“It’s really exploratory, giving students a window of several years – we hope four years – to discover their why,” Wahl said.

Why not
Joe Everest, owner of Ozark Fence & Supply Co., a three-generation family business, is an example of someone who chose to take an exit from the college route. Everest said he attended college for two years, but he felt like some of the material didn’t apply to his business.

“I really want my doctor to go to college; the guy that does our turf, it’s not as important to me,” said Everest.

Everest has nearly 50,000 subscribers to his YouTube channel, Joe Everest, The Fence Expert, where he offers tips on running a profitable business, and he offers in-person training, too, for fence companies across the country.

Everest thinks high school grads shouldn’t automatically go to college but suggests they wait until they know what they want to do for a job.

“If that career choice requires a degree, then go get it, but this getting a degree and hoping it will apply obviously doesn’t work,” he said.

Middle way
Miller noted there are a lot of ways to obtain an education, and increasingly, students are shaping their own experience. Workplaces, too, are beginning to shape experiences for their workforce.

Miller gave the example of CoxHealth, which has a program to pay for its workers to train to become medical assistants, and of SRC Holdings Corp., which pays for its employees earning an associate degree in manufacturing from OTC.

“I think for more and more companies and institutions, they’re waiting for a unicorn to walk in off the street who has the exact credentials and training, the exact amount of experience, and can work all the hours they want,” he said. “What CoxHealth and SRC figured out years ago is, we’re going to build that unicorn; we’re going to invest in this employee, skill them up, and get them into more of a leadership role.”

Chrystal Irons, director of business support at the MSU Small Business Development Center, said she works with small-business owners and sees varying education levels. Irons said each industry helps determine if a degree is needed.

Irons noted there are resources available that help business owners understand how to run a business without committing to a four-year degree. For example, SBDC offers classes in accounting and human resources, which business leaders need to understand in order to be successful.

“You figure it out somewhere, or you figure it out the hard-knocks way,” Irons said.

From a financial perspective, the college question is easily answered for Wahl.

“You make more money from a college degree; it’s difficult to debate that point,” he said.

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