Let’s Face It: Not Everyone Needs a College Degree

With high rates of underemployment among college graduates, maybe it’s time to rethink the idea that college is an absolute requirement

Jun 29, 2014 at 10:00AM

Flickr / gadgetdude.

It's conventional wisdom these days that a four-year college degree is a must-have in today's finicky workaday world, and there is plenty of data to back it up. Government data from the Bureau of Labor Statistics shows that median weekly pay last year for those with bachelor's degrees was $1,108, compared to $777 for an associate's degree, and $651 for high school graduates.

But, there are drawbacks: high student loan debt and underemployment, to name just two. Also, there is the fact that many people just don't feel inclined to go to college. Wouldn't it be great if there were some alternatives?

Growing evidence supports the theory that success can be attained without a four-year college diploma – although an associate's degree or some type of post-high school training is needed.

Two-year and four-year degrees both have value
A new study by the Federal Reserve Bank of New York shows that, despite declining wages for college graduates over the past decade, the economic return for a college degree – either two-year or four-year – is an impressive 15%. The biggest reason for this phenomenon is that, even though college degree holders have lost ground since the Great Recession, those with only a high school diploma have suffered even more.

What about that wage disparity between bachelor's and associate's degrees? The FRBNY authors looked at 40 years' worth of data, and found that both degrees have always produced equal returns – on a relative basis. For instance, while a bachelor's degree still "costs" between $100,000 and $130,000, a two-year degree has associated costs of between $40,000 and $60,000.

These figures include real expenses, as well as "opportunity costs", which is lost wages during one's college career. Even though college costs have risen over the past decade, pay for high school graduates has dropped so much that the overall costs have remained the same.


Flickr / Simon Allardice.

Opportunities abound
For those who prefer to forgo the four-year college experience, there are plenty of options available. Many professional occupations, such as dental hygienists and registered nurses, make between $55,000 and $75,000 per year armed with an associate's degree, while radiation therapists can make well over $75,000 with a two-year degree.  

If health care isn't your thing, some of those missing middle-skill jobs seem to be returning from the ashes of the recession – and employers are screaming for skilled workers to fill them. In Rochester, New York, 23,000 jobs are chronically unfilled because there are not enough community college graduates to fill them.

In New Jersey, unemployed four-year college graduates are being retrained to fill up to 50,000 mid-skill jobs in the state's manufacturing sector. In Houston, Texas, employers, banks, and community colleges are banding together to educate enough workers to fill the nearly 300,000 middle-skill jobs that the city expects to create within the next three years. 

As baby boomers retire, a whole section of skilled, well-paid trades jobs are opening up, as well. It is estimated that there are currently 3 million so-called "blue collar" jobs available in areas such as plumbing, welding, and electrical work. Many of these don't even require an associate's degree for entry. 

It's obvious that some training beyond high school is necessary to qualify for a good job, but a four-year degree isn't the only pathway to occupational success – especially if you choose a major with little career potential. Research the market before you start shopping for four-year colleges – you just might discover options you never knew existed.

An investment in your future that you won't want to miss
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information