The Value of a College Education

There is a strange dichotomy in higher education in that we have simultaneously elevated, and humbled, the value of a college degree. We have taken to minimizing inherent worth of abstract learning; just look at the decline in the humanities, where numbers of graduates in English dropped by a fifth between 2005/06 and 2015/16. At the same time, there has been a massive influx of students into STEM subjects, health studies and financial services. We acknowledge the power of these subjects to increase graduates’ earning power and help them secure employment.

These two trends don’t have to be in opposition. The assumption that liberal arts degrees will not gain you significant advantage in the employment market and will condemn you to low-paid jobs may not be true at all. LinkedIn research found that the skills most desired by employers in 2019 were creativity, collaboration and persuasion, supposedly the ‘soft skills’ that you learn from studying humanities. One of the five most desirable ‘hard skills’ was the soft-seeming people management. 

Brad Smith, the president of Microsoft, put his finger on it in his 2018 book, The Future Computed: “As computers behave more like humans, the social sciences and humanities will become even more important.” If that is the language coming from Gates-land, it would be wise to take heed.

Yet the other side of the equation is true too: a college education does provide more job opportunities and greater lifetime earnings for graduates than for those who don’t have a degree. According to the Bureau of Labor Statistics, those with a bachelor’s degree will earn some 66% more over their working lives than those who never made it further than high school. Graduates also have much lower rates of unemployment than those who do not, and generally receive better in-work benefits like health care insurance and child care stipends.

Does that mean that just any degree will do? Almost. It is wise to choose a degree program that is in some way fitted to the sort of job you want to pursue after graduation, but there has to be a balance between acquiring learning in a way you find enjoyable and satisfying, and choosing skills and training which will stand you in good stead for your working life.

Of course, all of this has to be paid for. The latest (2019) estimates are that attending a state university will bear a cost of around $21,000 a year, while studying at a private college will cost you nearly $47,000 a year. And this is where the EIC comes in. My generation of students was told that if you worked hard, got good grades and earned a strong degree, then you’d find a well-paid job with good prospects. Today, the costs of education are mounting and the job market is becoming more competitive. 40% of college students don’t even graduate. It’s an uncertain world, and young people are understandably nervous.

We at EIC have created American Dream Insurance to take away this uncertainty. To quote former US senator Barbara Mikulski, “College is part of the American Dream, it shouldn’t be part of a financial nightmare for families.” We agree. So we have brought together technology and financial services to give students and prospective students more certainty, more security, and a guarantee of higher economic mobility. Our program will give graduates a sure return on their financial investment, so that they get exactly what they’re paying for.

This isn’t just a matter of making sure that people who get degrees earn more, though of course that’s the basic building block. It has a ripple effect outwards: knowing that a degree is a passport to higher pay and better prospects will encourage applicants from more diverse socio-economic backgrounds, it will improve retention among students, and it will make those currently in degree programs happier and more engaged. It’s win-win-win-win.

That’s the fundamental nature of our proposition. It’s about empowerment, letting people achieve their fullest potential, and allowing students to concentrate on their studies. They can rise as far as their ability will take them without worrying about the financial consequences and pitfalls. It represents certainty, predictability, and freedom.

That’s why we believe passionately in both the potential and the goodness of what we’re doing at EIC. We think American Dream Insurance has the power to be transformative for 44 million American families. It can do so much good.

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