Yes, college is worth it

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When I graduated from UC Berkeley — 2010 — my annual fees were 36 percent higher than they had been in my freshman year. Since then, fees have increased further, due largely to the state’s disinvestment in public higher education. Students will get a reprieve from more increases this year, but they will still pay fees that are quadruple what they were in 1990. Rising costs led more of my fellow students and those who came after to go into debt to pay for college. And increasing student debt has ignited a debate over the question: Is college worth it?

A new Public Policy Institute of California report that I co-authored found that less than a third of California undergraduates took out loans 10 years ago. Today, the figure is closer to half. Between 2000 and 2005, the average amount a freshman at a California four-year public school took out rose $100 — from $3,800 to $3,900. In the next five years, that average rose by $1,400 to $5,300. Our report found that student debt is lower in California than in the rest of the nation, but it has still increased dramatically.

Yet the benefits of a college degree are still substantial. California college graduates are more likely to be employed than those who have only a high school diploma, and the gap between the two groups had grown wider since the start of the recession. College graduates earn significantly more money. A woman with a bachelor’s degree working in California in 2011 made 57.3 percent more than a woman with only a high school diploma, even after accounting for differences in work experience and other individual characteristics. For men, the difference in wage was 56.5 percent.

With the cost of college increasing, a lot of us have worried about whether our degrees would be useful to employers. Granted, some majors do result in higher wages than others. Yet even college graduates in the least lucrative majors have median wages well above high school graduates who do not go to college. College graduates at the low end of the wage range earn a median annual wage of $57,000, compared to just $39,000 for workers with only a high school diploma. It’s important to note that students who drop out of college don’t fare nearly as well in the labor market.  They, along with students who borrow excessive amounts — our benchmark was $40,000 — are at the highest risk of loan default.

Our report concluded that for students at Cal and California’s other public colleges, a college degree is worth the cost.  If taking out a loan allows you to go to a California public college and get a degree, taking on debt is probably a smart economic choice.

And, as we highlighted in our report, the benefits of a college education extend beyond you and your fellow students. Historically, high-quality and  affordable education has been instrumental in the state’s prosperity. An educated population produces higher tax revenues, relies less on public services and makes for a competitive workforce. PPIC research shows that by 2025, California will be one million college graduates short of the number needed to fill workforce demand. In other words, California’s future economy and the well-being of all of its residents depends on students attending and graduating from college in larger numbers.

For this reason, our report recommends that the state find ways to make college affordable for more Californians. Two programs that have helped mitigate the costs at the University of California are the Cal Grant and the Blue and Gold Opportunity Plan. Without them, our figures would be even more troubling. Another way is to improve pathways from community colleges to UC and other four-year institutions. Finding ways to help families save for college should be another state priority. Some states, for example, have created college savings programs that guarantee full tuition at public universities. Finally, to keep costs down, state policymakers and higher education administration need to ensure adequate funding of higher education institutions, because college is worth it — for future Californians as well as today’s students.

David Ezekiel is a research associate at the Public Policy Institute of California (PPIC). He co-authored the PPIC report Student Debt and the Value of a College Degree with Hans Johnson, Marisol Cuellar Mejia, and Betsey Zeiger.