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Is Going to College Worthwhile? Based on a New Study, It Depends

We've all heard the adage that if we want a good job, we have to go to college first. In the past -- and when I say "the past," I mean two decades ago or longer -- getting a college degree did generally mean a well-paying job awaited you, and that companies would be waiting with open arms to welcome you into the workforce once you graduated. Nowadays, with online and community colleges popping up everywhere, it appears that as many people are in college because they lack direction as those that are seriously focusing on getting a specialized degree.

Source: Sakeeb Sabakka, Flickr.

With college costs rising at what seems to be an exponential level over the past decade, the question of whether or not college is right for everyone has become all too common. For certain degrees -- lawyers, doctors, and so on -- there is no choice; go to college, or look for another job. For many other jobs, though, a college education is turning out to be not nearly as pertinent.

Do you need a college degree at your job?
A Gallup poll conducted earlier this week aimed at the heart of this question by asking 1,039 full- and part-time workers their assessment of whether or not their job requires a college degree. The results were interesting to say the least. 

Does the type of work you do require a college degree?

Yes, degree required

No, degree not required

No opinion

August 2013



< 0.5%

August 2005



< 0.5%

August 2002




Source: Gallup.

As you can see from the most recent poll, more respondents did state, relative to 11 years ago, that a college degree was pertinent to their job. However, in the grand scheme, nearly 6-in-10 job-holders assessed that their job should not require a college degree.

But, as you might imagine, there's a catch.

The catch is that the emphasis of college importance is based on the type of job an individual hopes to gain (or already has) once out of college. When breaking down the respondents into certain job types, the results look something like this:

Does the type of work you do require a college degree?

Yes, degree required

No, degree not required

Professional / Executive / Managerial



Other white collar



Blue collar



Source: Gallup.

As you might suspect, jobs of high responsibility, company leaders, and highly specialized jobs often require a college degree based on the assessment of current employees. For those not in that position, four out of five jobs do not require a degree, according to current workers!

Why the big gap? Well, technology has played role in closing the need for specialization in a lot of industries. Automated production lines and cloud-based software capable of managing inventory and handling accounting are just two examples where technological improvements are displacing the need for a higher education.

Investing implications
The most obvious beneficiaries here are state universities. Clearly, high-level colleges that cater to specific areas of specialized study remain in high demand and will continue to be worth every penny no matter how overpriced they may seem. So when you exit college $200,000 in debt with a degree in neurosurgery, understand that it was worth it!

However, the losers of the bunch look like for-profit educators. Companies like Apollo Group (NASDAQ: APOL  ) with its University of Phoenix, DeVry (NYSE: DV  ) , Washington Post (NYSE: GHC  ) with Kaplan University, Bridgepoint Education (NYSE: BPI  ) with Ashford University, and even to some extent ITT Education Services (NASDAQOTH: ESINQ  )  would all seem vulnerable to the college negativity surrounding this survey.

That's bad news, because the entire for-profit education sector is already in hot water with U.S. regulators for its questionable lending practices and marketing tactics dating back nearly three years. For-profit colleges now need to follow strict guidelines when it comes to lending to students, ensuring they don't overburden students with debts that will never be repaid. They also have to be careful not to overpromise on what results students can expect on the job front after completing their online or university education. In general, these colleges offer specialized blue-collar or entry-level training that, in some cases, can be handled on the job with no degree. Therefore, the prospect of paying up to $20,000 or more for a degree versus simply getting a job in the real world without a degree may not be worth it.

As we've seen in recent years, a number of people are choosing to pass up technical colleges in favor of getting a job or biding their time until they're accepted into a state college. Enrollment figures among for-profit educators have been dismal for the most part, with Apollo Group reporting a 15% decline in student enrollment in 2012, and DeVry also noting a trend that worsened by mid-2012 to a decline in new student enrollment of 14%. 

Until there's a clearly defined trend that technical colleges are once again a requirement in the workforce, and that the value/income potential trade-off is worth it, the for-profit education sector will remain a volatile, and probably off-limits investment

With so many ongoing question marks surrounding the for-profit sector, let this latest Gallup survey serve as a reminder that solid companies selling at depressed prices are what have consistently helped generations of the world's most successful investors preserve capital, minimize risk, and achieve long-term, market-trampling returns. If you'd like to find out about one such company, read our free report: "The One REMARKABLE Stock to Own Now." Just click here to get started.

Read/Post Comments (10) | Recommend This Article (7)

Comments from our Foolish Readers

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  • Report this Comment On September 10, 2013, at 10:57 AM, johnnycap wrote:

    This is a nice one sided article but how about including all the facts. Like what is the unemployment rate for those with college degree's versus those without? Or how about, average annual salary for those with a Bachelors versus those with only a high school diploma. I think if you look at those two states it will become quite clear the a college degree still holds great value. Would you have your job without one?

  • Report this Comment On September 10, 2013, at 12:46 PM, CMFSircc wrote:

    Yes, a college education is worth the costs

    ....Who populates the ranks of the unemployed? According to Bureau of Labor Statistics (BLS) for 2010:

    •14.9% of those without a high school diploma

    •10.3% of those with a high school education

    •7% of those with an associate degree

    •5.4% of those with a bachelor's degree

    •2.4% of those with a professional degree

    •1.9% of those with a doctoral degree.

    See a trend here?

    We talk about stimulating the economy by increasing the tax base. Once again, educational attainment correlates with income, according to BLS. Here's the average weekly income for those who have jobs:

    •$444 for those with less than a high school degree

    •$626 for those with a high school degree

    •$767 for those with an associate degree

    •$1,038 for those with a bachelor's degree

    •$1,550 for those with a doctoral degree.....

    Fool on , cabincruser

  • Report this Comment On September 10, 2013, at 12:54 PM, cmfhousel wrote:

    Average wage, age 25-34, with Bachelor's degree: $49,800.

    Average wage, age 25-34, with high school diploma: $32,800.

    Average student loan balance: $12,800.

    On average it's best investment most will ever make.

  • Report this Comment On September 11, 2013, at 8:57 AM, KombatKarl wrote:

    I finished my BS in 2005 at the age of 36, it cost me $25k in student loans. I immediately landed a new job that increased my salary by $18k, and my salary at the same job has gone up another 40% since.

    Yeah, I would say it was worth it.

  • Report this Comment On September 11, 2013, at 9:44 AM, TMFHobo wrote:

    You guys are making the mistake of confusing causality with correlation. Just because salaries and employment are correlated with degrees, doesn't mean that education is the cause - or the only one.There is obviously a self-selection bias in those who choose to go to college in the first place, not to mention a cultural bias in favoring those with college degrees.

    As Sean says, the fact that a majority of college graduates believe their job doesn't require a degree should tell us something. More often than not, tt's the piece of paper that counts, rather than what you've actually learned.

  • Report this Comment On September 11, 2013, at 9:48 AM, cmfhousel wrote:

    << More often than not, tt's the piece of paper that counts, rather than what you've actually learned.>>

    Totally agree. But that piece of paper really, really counts.

  • Report this Comment On September 11, 2013, at 9:50 AM, cmfhousel wrote:

    To elaborate, that piece of paper shows a potential employer that you can focus for 4+ years, study for tests, pass tests, work in groups, etc. When an employer has so little information about a young worker with no previous job experience, that's incredibly important information.

  • Report this Comment On September 11, 2013, at 9:56 AM, cmfhousel wrote:

    Also, saying "correlation doesn't mean causation" doesn't end the argument. Studies that dug deeper into the relationship between education and wages show a causal link.

  • Report this Comment On September 11, 2013, at 10:43 AM, Johny205 wrote:

    One would also have to compare the cost of getting a BS degree with just learning a good trade like welding, carpentry, plumbing, ect... Within 4 years you can be making $30 + per hour. A journeyman tradesman in the Union makes more than $60 per hour when adding in all the benefits. If one decides to run their own company, they can easily net well over $100,000 per year with only one or two employees working for them. That ends up being more money than almost any BS position, without any loan payments. Not only don't you have to pay off the college debt, but you can make money for the 5 years it took to get a degree. When I was 19 I joined the Laborer's Union making $23 per hour on my check plus benefits, which equaled about $55 per hour. Add up all those wages for 5 years and it is roughly $200,000 plus $40,000 in tuition you don't have to pay and you are ahead about a quarter of a million dollars from someone betting a BS degree. That could take about 30 plus years to get to a break even point from gettting a BS degree. Most people with a BS will start out at about 30K per year and will not make 50K per year until about year 4 or 5. Most likely they will not make 10K more per year than a tradesman until they have been working for about 10 years at the same job. Hard work isn't for everyone, but it is a good option people should consider. I know builders and contractors that make more money than most lawyers, doctors and bankers.

  • Report this Comment On September 11, 2013, at 11:12 AM, OceanJackson wrote:

    The student loan / college cost to salary prospects, statistically weighs in favor of going to college.

    But this isn't to say that college in America has primarily become big business, its goal to make money and produce life-long workers.

    Now, of course the college administrations & faculty will disagree vehemently. And to say that they are in on the scheme would be insane.

    It's those way above them on the money-chain, that do this.

    I went to UC Berkeley, I had a good college experience. I have gotten jobs in the 6 figures. But I still am able to see the systematic way in which the Upper-Class keeps the Middle & Poor down, by convincing them they need to do something, then charging them an arm & a leg & another arm for it, selling them on a "Middle-Class" life and making it as difficult as possible to get out of it...of which the larger American college system and it's debt creating power, is a major tool of the powerful to create the life-long workers it needs for their companies.

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