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July 2014 Brief: Volume 21, Number 20

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Even the Shouting Is Over – Now What?...We’re Happy!

 

by Deborah D. Thornton

 

 

The month of May was filled with high school graduations, relatives visiting, parties attended, photos taken, and “shrines” to the graduates’ accomplishments crafted by their doting mothers. I know, I am one. In June we all collapsed and said, “That was…fun? Hectic? Awful?”

 

Now what? On to a job, the military, or college?

 

The Pew Research Center recently issued its updated report of facts about today’s college graduates. It makes for interesting reading for doting, or delusional, mothers and fathers.

Only about 56 percent of our darlings actually earn their college degree, and most take six – not four – years to do so. More (75 percent) of those who attend private, non-profit four-year schools do, compared to their public college peers, and more take only four years. They know how much money Dad and Mom are paying.

 

The extension of the four-year bachelor degree into six, even at a public college, has significant financial implications for both parents and students. A year at the University of Iowa for an in-state student costs about $21,000, including tuition, housing and meals, books, personal expenses, and transportation.[1] Out-of-state students pay double that. Students who take six years to earn their degree will add from $40,000 to $80,000 to their total costs.

 

At least some will hopefully have a degree which will enable them to understand and analyze this decision, as one-fifth of all students today major in business. Since 1981 business has been the most common major; before that it was education. The least common degrees are library science, military technologies and applied sciences, and precision production.[2]

 

Unfortunately, most of our recent college graduates (44 percent) are “underemployed;” that is, they are holding jobs which do not actually require a college degree. Further, only about 36 percent of those jobs were considered “good” jobs, defined as those which pay $45,000 per year or more. Over 20 percent of the underemployed are in jobs paying less than $25,000 per year and another 23 percent are only working part time.[3] Those are the ones living at home in our basements, staring at their old Obama posters.

 

There were about 3.9 million total job openings in 2013, up from a low of 2.1 million in July five years ago, but still well below the average of 4.5 million in 2007, according to the U.S. Bureau of Labor Statistics May report. Only about 17 percent of those, or 663,000, actually require a college degree, according to BLS estimates.[4] At the same time, 1.6 million people will graduate from college with a bachelor’s degree in 2014. Therefore, most of these young people are underemployed. Over 64 percent of those graduating from public universities are paying off college loans, as are 74 percent of private school graduates.[5] The average amount of debt is $25,600 for public graduates, and from $32,300 (non-profit) to $40,000 (for-profit) for private school graduates.[6]

 

Most baby boomers, gen-Xers, and millennials think their degree either has or will pay off in better jobs and higher earnings. Of those making six figures, 98 percent think their college degree has paid off, while 63 percent of those earning less than $50,000 do. In general this is true, as in the long run most people with college degrees end up making more ($45,500 per year median annual earnings) than those with only some college ($30,000) or a high school diploma ($28,000).[7]

 

Parents who send their child to in-state public universities instead of expensive private colleges or to out-of-state institutions will be happy to know that their offspring will have the same feelings of “personal satisfaction and economic well-being” as their peers who make those more expensive choices. According to Pew survey research, 93 to 94 percent of both groups are satisfied with their family life, about 76 percent are satisfied with their financial situation, and over 66 percent are satisfied with their current job. More important than the type of college, according to the people Pew surveyed, is the (happy) experience they have while there. These positive experiences include having a good mentor, an internship, or work-related experience.[8]

 

I’m sure all those mothers and fathers putting away the shrines to the accomplishments of their high school graduates are relieved to know that no matter what their child will “clap along if you feel like happiness is the truth!,” as a result of going to college, even if they’re still living in the basement.[9]

(Endnotes)

[1] “Estimated Costs of Attendance,” The University of Iowa, <http://admissions.uiowa.edu/finances/estimated-costs-attendance> accessed on June 1, 2014.
[2] Drew DeSilver, “5 Facts About Today’s College Graduates,” Factank News in the Numbers, Pew Research Center, May 30, 2014, <http://www.pewresearch.org/fact-tank/2014/05/30/5-facts-about-todays-college-graduates/#more-259795> accessed on June 1, 2014.
[3] Ibid.
[4] Mike Shedlock, “BLS Employment Projections Through 2022: How Many Jobs Require a College Degree?,” MISH’S Global Economic Trend Analysis, May 29, 2014, <http://globaleconomicanalysis.blogspot.com/2014/05/bls-forecast-of-occupations-with-most.html> accessed June 1, 2014.
[5] Anna Brown, “Public and Private College Grads Rank About Equally in Life Satisfaction,” Factank News in the Numbers, Pew Research Center, May 19, 2014, <http://www.pewresearch.org/fact-tank/2014/05/19/public-and-private-college-grads-rank-about-equally-in-life-satisfaction/> accessed on June 1, 2014.
[6] Anna Brown.
[7] Drew DeSilver.
[8] Anna Brown.
[9] Lisa Respers France, “Seems like the whole world is ‘Happy’,” CNN Entertainment, March 20, 2014, <http://www.cnn.com/2014/03/20/showbiz/music/happy-pharrell-williams-song/> accessed on June 1, 2014.

 

Deborah D. Thornton is a Research Analyst with Public Interest Institute, Mount Pleasant, Iowa. Contact her at Public.Interest.Institute@LimitedGovernment.org.

 

Permission to reprint or copy in whole or part is granted, provided a version of this credit line is used:"Reprinted by permission from INSTITUTE BRIEF, a publication of Public Interest Institute." The views expressed in this publication are those of the author and not necessarily those of Public Interest Institute. They are brought to you in the interest of a better-informed citizenry.

   

 

 

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