The mountain of student debt that many college graduates now face has state policymakers asking a question that was once viewed as a no-brainer: Given the rising cost of tuition, is a college degree still worth the price of admission?
The answer, according to the Colorado Department of Higher Education, is yes — with a critical caveat: some degrees are worth significantly more than others.
Gov. Jared Polis, at a news conference at the Colorado Capitol on Tuesday, unveiled the department’s first “return on investment” report, an annual cost-benefit analysis requested by the legislature in 2018.
“The good news is, higher education is a good investment — no matter what field you choose,” Polis said.
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The bad news? For some fields, the monetary value of that investment is murky. And a Colorado Sun analysis found that roughly half of Colorado students are paying for four-year degrees in fields that pay less than they could make with a one-year technical certificate or two-year degree.
“These are the choices that individuals make — and some of them, unfortunately, really have to struggle with,” Angie Paccione, who leads the Colorado Department of Higher Education, told the Sun in an interview.
But, Paccione added, the hope is that by providing the data, students and parents can make a better informed choice — even if money isn’t the only the factor in choosing a profession.
Here are some key takeaways from the report, which is available with supporting data here:
Higher education is critical. 4-year degrees aren’t.
About 75% of Colorado jobs require some form of education beyond high school, according to the state. A whopping 97% of “top jobs” that have a high growth rate and pay a living wage require higher education.
But what the report hammers home is that higher education — and the earning potential that comes with it — no longer necessarily means a four-year degree.
Someone working in health care with a two-year associate’s degree can make almost as much after 10 years as someone with a four-year bachelor’s degree in the same field.
The average worker in a skilled trade — think electricians, plumbers and technicians — with a two-year degree makes more than $64,000 after 10 years in the profession. Those with a one-year certificate make about $58,000 at the 10-year mark. That’s more than the average graduate with a bachelor’s in arts, social sciences or education.
Those higher earnings don’t take into account the higher cost of a bachelor’s degree. Tuition costs vary wildly from college to college, and are based on a person’s family income, which helps determine financial aid.
For someone whose family makes between $48,000 and $75,000, the average two-year degree costs $14,700 a year including housing and meals, or $29,400 total. A four-year degree averages $19,300 a year, or $77,200 total.
And that’s if a student graduates on time. The typical undergrad takes 4.66 years to finish a bachelor’s degree, and almost four years to finish an associate’s degree.
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Students aren’t pursuing the most lucrative fields.
Arts, humanities and communications programs were the degree of choice among Colorado public college students in the fall of 2017, making up 38% of enrollment.
But out of the seven program categories analyzed by the department, it had the second lowest earning potential, with the typical graduate making an annual salary of about $50,100 after 10 years.
Throw in education degrees ($45,200) and social and behavioral sciences and human services ($52,900), and 50% of all four-year college graduates earn less than the average person with a two-year associate’s degree ($54,600) after 10 years in the workforce.
The top-earning academic programs, with $76,053 in annual earnings at the 10-year mark, are STEM-related fields — short for science, technology, engineering and math. That was the second most popular choice among students, with 20% enrolling in such programs.
The report does not address the earnings of people who don’t enroll in higher education. But in an interview, Paccione said the median wage for someone with a high school diploma is about $32,000.
The data doesn’t clearly show the bang for a student’s buck.
While the report shows how much a student can expect to make with a given degree, it stops short of a full cost-benefit analysis.
Is a higher paying job a decade from now worth the significant up-front investment of a four-year degree in every case? Or does a one-year certificate with lower wages offer a better return for the price than, say, a major in history? The report doesn’t offer an answer.
Some of this is due to the wide variance in what a degree actually costs. Tuition and fees vary greatly by institution and by family income, which helps determine how much financial aid a student receives. Other factors matter, too, like whether a student or their parents saved enough to pay for college in cash, or is saddled with loan payments for decades to come.
“We wanted to provide this data so that students and families can make those decisions on their own,” Paccione said.
Still, there’s no doubt from the report that the rising cost of tuition has made some degrees a less valuable investment than for generations past.
From 2008 to 2018, the sticker price for tuition and fees increased by 52% at Colorado’s two-year public institutions, and by 68% at four-year public institutions. Nationwide, those costs only rose by 37% and 32%, respectively.
About 69% of Colorado bachelor’s degree recipients in 2018 graduated with outstanding student loans. But the average student debt of $25,500 was down from a high of $27,200 in 2016.
The teaching profession is in crisis.
Out of all the four-year degrees, none looks like a riskier investment than a bachelor’s in education.
Not only does a four-year degree in education lag other bachelor’s degrees, it’s even worth less than the typical one-year certificate or two-year associate’s degree. And that’s before accounting for the higher cost of a four-year program.
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A first-year graduate with an education-related bachelor’s can expect to make just $34,200, according to the report. A 10-year professional makes $45,100 on average.
Students are taking note. While other low-earning degrees remain popular, the teaching profession is producing fewer and fewer graduates. Just 2% of those enrolled in a four-year program in fall 2017 were pursuing an education degree. At about 4,000 students, that’s less than a third of the enrollment of any other academic program.
Paccione said she recently met a Fort Lewis College student who was switching to nursing from teaching, in part because she was worried about being able to pay off her loans.
“She said, ‘It kind of breaks my heart, because I really love working with little kids,’” Paccione recalled.
The report stops short of recommending a fix. But the upshot for policymakers is clear: Colorado’s teaching profession either needs to pay more, or cost less to get into, otherwise the statewide teacher shortage is likely to get worse.
Staff writer Jesse Paul contributed to this report.