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50-Plus Finance: Is a college degree obsolete?

David Leto
by David Leto , Dimespring 30 (@50PlusFinance)

In the coming year, my family will be going to three college graduations. My daughter and two stepsons will all finally be graduating college, meaning they will all be looking for jobs

They have been busy for awhile now looking and making contacts to see if they can find work, but the fact is there just aren’t a lot of jobs available. With so much time and money put toward an education, only to find extremely limited prospects for employment, it makes you wonder if it was all really worthwhile. Is college really such a valuable investment?

READ: 10 job hunting myths 

Thanks to the Bureau of Labor Statistics (BLS), we’ve learned that college is becoming increasingly unnecessary for the growing  jobs of the next decade. In the list of the top 30 fastest growing jobs needed within the next 10 years, only five of them require a college degree. Those jobs include physicians, accountants, elementary school teachers, post-secondary teachers and nurses. The remaining 25 only require a high school diploma or minor college education.

In some ways this is good news, because the United States total student loan debt has surpassed $1 trillion dollars. A college education has finally priced itself above the means of the average person. Only by taking out large student loans does anyone have a chance of paying for college.

Add to this the fact that those college graduates are having a hard time finding jobs, making the competition for available jobs fierce. Unable to find work, many college grads to go back to school to achieve even higher education like master’s and doctoral degrees. The end result: the average four-year degree is not enough anymore to compete in a shrinking job market.

READ: How to beat the most common post-grad money mistakes

But brighter skies are on the horizon. The BLS data shows that the decade that started in 2010 and ends in 2020 will see the number of jobs grow by 20.4 million. Just the top 10 jobs on the list account for half of all job expansion.

So why does future job growth consist of mostly low-education jobs?

Predicted job growth is not going to be high-tech and high-paying jobs. These growing industries are calling for labor-intensive, blue-collar jobs. These types of jobs will be paying salaries in the range of $30,000 to $50,000 per year. In today’s economic environment, that just isn't enough to provide for a family of four.

Our children have been given two choices in their careers: they can either take on large student loan debt pursuing a college education, or pass on a college education and take low-paying jobs that don't need post-high-school education. 

READ: What's the real value of a college degree? 

Many statistics praise the idea that a college degree will allow you to earn much more in your working career. It's said that you could make as much as $1,000,000 more in your lifetime. In reality, the actual figure is closer to $300,000.

The rate of student loan default is on the rise. Citigroup estimates that already $74 billion of the $1 trillion in student loan debt is in default. This number is expected to grow with more graduates entering the workforce and not finding work. 

The student loan system run by the government is like déjà-vu of the real estate bubble. Loaning money to people who have a very small chance of paying back their loans doesn’t make sense. Graduates have been sold a bill of goods on borrowing money for education.

As a parent of three children on the verge of graduation, I would like to offer a bit of advice on what a college education means in today’s job market. I think we can all agree that we are going to see the economy repair itself, but realistically it could take the rest of the decade. This slow growth will impact hiring decisions. I am all for following your dreams of a career, but parents need to offer guidance. It doesn’t make sense career-wise or financially to pursue a job that is not in demand. 

 

David Leto writes about family, finances, and retirement planning for the 50-plus person. David is a member of the Dimespring 30, a community of bloggers sharing their thoughts, experiences and attitudes on personal finance.