Calculating Deferred Gratification

How confident are you with economic and career forecasting?

Recently I had a fascinating conversation with a smart community college student keen on pursuing a career in health care. The first in her family to attend college and an immigrant to the United States while in high school, she told me that she loves the life sciences, helping people, and school. She is doing extremely well academically. She plans on obtaining a certificate that could give her an allied health job soon or possibly transferring to a four-year institution for something that would pay better in a more advanced health care setting. She was not sure what the best academic and career path might be. Looming large in her mind were questions about financing her education. Would she obtain financial aid? How much would the next phase of her education cost? And what would be the return?

We talked about her classes and her professors. The young woman’s commitment to learning was unmistakable. She is the kind of student that makes professors happy to stay after class, to write letters of recommendation, and to teach independent studies. She told me that her teachers were encouraging her to think about graduate schools and the long-term.

“What about becoming a doctor?” I asked. I quickly discovered that I was not the first to ask. She thought that she could handle the work, as did one of her mentors. However, she was not sure that she wanted to assume the risk and delay employment. The path to an MD is long and difficult.

Reports and data are increasingly available to help students make informed decisions about institutions, majors, and career options. Payscale offers boatloads of information on the average salaries of degree holders by institution and by majors (and helps to figure salaries by jobs). Their College ROI report is an interactive website, capturing and organizing data on tuition, salary outcomes, and student debt.  The graduates with the highest salaries are engineers, unsurprisingly.

The Pew Foundation recently highlighted “The Rising Cost of Not Going to College.” Looking at median salaries for those in their mid-twenties, some college was better than high school. Associate degree holders earned more than those without. And on average, college degree holders earned more than associate degree holders.

The overall message of these and other sites is that more credentials usually correlate with higher salaries, as do specialized technical skills. It makes sense from a high-level understanding of labor markets.

What the reports cannot give is information on the value of an individual degree to an individual student. That is a difficult question that defies simple answers. The value of an education can change over time and no one has multiple lives with which to compare different educational opportunities. Further, for many students the process of attending college, which is both a developmental stage and the marking of a person’s wish to change and grow, can reshape priorities. In other words, what is deemed valuable by an entering first year student very well may change by graduation.

Equally important in the value question is appreciating the socioeconomic status of a student before attending an institution of higher education. What makes for a successful education? Is it a stretch goal or a means of securing stability? And who is making the judgment?

The student I talked with will maximize our institution’s ranking  – at least according to these macro-economic reports – by deferring employment and pursuing an advanced graduate degree. It would be foolish, though, for me to simply advise for more credentials and more specialization. It is essential to acknowledge her values, her needs, and to understand her perspectives and her priorities. An associate degree and a job in health care may be a super decision for her and her family.

It is important for those of us in higher education to set high standards for our students, to encourage them to set ambitious goals and to challenge themselves, and also to be mindful that there is more than one way to measure the return on an educational investment.

David Potash

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