Big news: Gen Edgers (born after 1995) are turning 18 this year. So, quite expectedly, that means this generation of teens and their parents (mostly Gen Xers) are talking seriously about the value of an expensive college education.
With the steep increase in higher education tuition rates and the myriad of options (state school, private, online), how can they ensure that a costly degree is worth it? How can the skeptical Gen Xer feel good about the amount of money they will spend on college and the debt they and their child will likely accrue over the next 4-5 years? (The fifth year is the ceremonially expensive victory lap!) My BridgeWorks Gen Expert advice for a skeptical Gen Xer: though it may seem strange, take a note from the Millennials who are wrapping up their tour de force in academia.
The Millennial generation experienced everything from terrorism in the classroom (Columbine, Virginia Tech, etc.) to a major financial downturn when applying for their first real jobs. Through it all, the Millennials stayed strong and optimistic. They took the barista job after college until nailing down the first corporate assistant position. They built the new Silicon Valley and championed an entrepreneurial spirit during a time when established institutions were crumbling.
Boomer parents told their Millennial children that the path to a secure future and making a difference on the world could only be found through higher education. So, Millennials flocked to degree granting institutions. According to the National Center for Education Statistics, enrollment increased 37 percent in these institutions between 2000 and 2010 from 15.3 million students to 21 million. A generation taught to chase their dreams and leave their stamp on the world around them acted on that inclination by joining academia.
Fast-forward to the graduation of many of these students and the job market came to a screeching halt. The financial crisis caused Millennials to boomerang back into their childhood homes and put their dreams on hold. Today, 40 million Americans owe $1.2 trillion in student loan debt, tripling itself over a 10-year period.
No job + lots of debt + future put on hold = a pretty grim life for Millennials… right? Wrong. Millennials continue to stay positive and strongly believe that those years in higher education and their giant mountain of debt was well worth the money. And the research supports them.
The Pew Research Center reports that college is worth much more now than ever before, even with students incurring more debt. A bachelor’s degree or higher is worth $45,500 per year for Millennials while it was worth $43,663 for the Gen Xers before them. Even more, Millennials without a bachelor’s degree are earning $28,000 per year. To compare with their grandparent’s generation, Traditionalists were earning more with a high school diploma at $31,384 per year in 1965. Pew took this research further by surveying four generations on their opinion of college worth… they found that 9 out of 10 college grads in every generation feel that their higher education degree has been worth the investment.
So, Gen X parents, as you are gearing up to have the college/money conversation with your children in the not too far off future: borrow some of that Millennial optimism and think about the value of a degree as you explore the world of higher education. You will undoubtedly be awestruck by the cost, but at least the value of that education is lasting. And for the Gen Edgers entering the college world, I’m sorry to say that the cost of beer has gone up with the cost of education.