The Value of Education

According to EarnMyDegree.com, education has a significant effect on a worker's annual and lifetime earnings:

You can make much more money by earning a college degree.

The data shows that a college degree correlates directly to your salary range—and the relationship between compensation and education level is becoming even more prominent.

At the turn of the 20th century, American working life was different. Only a minority of adults had a high school diploma. But by 1975, full-time workers with a Bachelor's degree had 1.5 times the annual earnings of workers with a high school diploma. By 1999, this ratio had edged up to 1.8. As our society has continued to evolve, education has become the optimal route to professional success: pursuing a degree is the best way to receive training, to gain expertise in a given field, and even to guide you and help you make choices about your career.

Today, a formal, focused education is an essential ingredient. Employers have increasingly used diplomas and degrees as a way to screen applicants. And once you’ve landed the job you want, your salary will reflect your credentials. On average, a person with a Master's degree earns $31,900 more per year than a high school graduate—a difference of as much as 105%!

Average Annual Earnings for College Graduates and Non-Graduates
Professional Degree
$109,600
Doctoral Degree
$89,400
Master's Degree
$62,300
Bachelor's Degree
$52,200
Associate's Degree
$38,200
Some College
$36,800
High School Graduate
$30,400
Some High School
$23,400
Average Annual Earnings—Different Levels of Education.
Source: U.S. Census Bureau, Current Population Surveys, March 1998, 1999, and 2000.
Making a Lifetime of Difference.

By the time you comfortably retire, you’ll look back and see that your earnings increase, as figured by your level of education, has compounded over your lifetime.

A person with a Bachelor's degree will earn, on average, almost twice as much as workers with a high school diploma over a lifetime ($2.1 million compared to $1.2 million). This is a result of not only higher starting salaries for people with higher education levels, but also the sharper earnings growth over the course their careers.

Work-Life Earnings for Full-Time Employees (in $ millions)
Professional Degree
$4.4
Doctoral Degree
$3.4
Master's Degree
$2.5
Bachelor's Degree
$2.1
Associate's Degree
$1.6
Some College
$1.5
High School Graduate
$1.2
Some High School
$1.0
Average Lifetime Earnings—Different Levels of Education.
Source: U.S. Census Bureau, Current Population Surveys, March 1998, 1999, and 2000.

Retrieved November 15, 2009.

High school students paid to go to class

In the October 12, 2009 TIME magazine article "Students Paid to Go to Class and Get Good Grades," Bruce Crumley reports that "a program in France will reward the students most likely to fail and drop out." Since education is one of the keys to sustained economic growth, is this a good economic intervention in the marketplace? Is this a good use of government policy to nudge society into making better choices?

Few things in France can provoke heated debate faster than moves to tinker with the country's vaunted public-education system, which embodies republican values that date back to the French Revolution. It's especially true when the changes involve an idea as capitalistic and nonegalitarian as paying certain students - the ones most apt to fail and drop out - to attend classes and get good grades.

This is exactly what's happening in a pilot program that started this month at three vocational high schools in disadvantaged suburbs of Paris. Accounts will be set up for two classes in each school, each containing around $3,000 apiece. If the students maintain good attendance records and reach performance targets agreed upon with their teachers, reward payments will be added to their class account. But here's the catch: the students can't go and spend the money on a new iPod or an Xbox at the end of the year. Each account, which could reach a maximum of $15,000, can only be used to finance a school-related project or endeavor, such as a class trip abroad to improve foreign-language skills, computer equipment for the classroom or driving lessons to obtain a license. Still, not a bad deal.

The government's objective is simple: increase student motivation and class attendance and reduce the number of French teenagers who leave school without earning a diploma or professional training certificate, roughly 120,000 to 150,000 each year. The program is being tested at vocational schools, not at the more traditional high schools that most students attend to prepare for the Baccalaureate exam - and university study beyond. The reason: students at vocational schools, particularly those in marginalized, immigrant-heavy areas, tend to have the most performance problems in France. Many students feel like failures after ending up in professional schools. Some also lose interest when they're moved to classes they're not interested in due to lack of space in the ones they'd requested. Truancy and dropout rates are high.

Naturally, though, such a controversial idea is bound to spark opposition, especially in France. Organizations representing parents, teachers and students from the right and left alike have denounced the measure as sending an unacceptable message to students about what education is about. "We strongly oppose the idea of remunerating students for having fulfilled the basic requirement of attending school," says Philippe Vrand, president of the Parents of Public School Students group. "We should spend this money making sure vocational students who wanted to learn cooking can get into those programs rather than being shunted into car repair because there was no room left. Instead, students are being paid off to compensate [for] their boredom."

Other opponents argue that the program flies in the face of France's egalitarian ideals regarding education - that students be taught that they're equal citizens regardless of their background and they should accept the responsibilities that go along with equality under the law. "We teach students, educate them and raise them in school, but we don't pay them," says Albert-Jean Mougin, vice-president of the union representing teachers at middle schools and high schools. "We mustn't turn education into a commodity, nor turn accepting responsibilities into transactions between students and educators."

Similar motivation schemes have worked elsewhere in the world. In the U.S., for example, more than a dozen states have started rewarding students with cash for improved test scores and enrollment in advanced-placement courses. In Britain, the Education Maintenance Allowance (EMA), which focuses on helping children from lower-income families, awards students with monthly payments if they've met attendance and performance targets. Like its U.S. counterparts, the EMA initiative puts money directly into students' pockets to spend as they wish. In the decade since it began, the program has reversed dropout rates by more than 2% annually.

Education officials will closely monitor students' attendance and performance rates during the two-year duration of the Paris-area program. Even if the initiative succeeds, however, officials say they still won't expand it nationally if public opinion is against it. If that happens, the government may be faced with another dilemma: responding to students' angry complaints at being denied their monthly allowances.

College cutbacks make it harder to earn degrees

In the October 12, 2009 article "College cutbacks make it harder to earn degrees," Associated Press writers Terence Chea and Justin Pope report that the economic recession is making it more difficult for many students to complete their college degrees:

SAN FRANCISCO – It isn't just tuition increases that are driving up the cost of college. Around the country, deep budget cuts are forcing colleges to lay off instructors and eliminate some classes, making it harder for students to get into the courses they need to earn their degree.

The likely result: more time in college.

And while that may sound agreeable to nostalgic alumni, to students like Michael Redoglia, time is money.

Early this semester at San Francisco State University, Redoglia unsuccessfully crashed 26 different classes, hoping to find space that would move him closer to a hospitality management degree. Outside some classrooms, wait-listed students took turns standing closest to the door so they could hear the lecture and not fall too far behind should they get in.

Redoglia, a fourth-year student, is now enrolled in just two courses. He could lose financial aid, and his plan to finish his degree in 4 1/2 years is up in smoke.

"This semester has put me back another full year," said Redoglia, adding that the delay is "killing me financially."

Policymakers right up to President Barack Obama have been calling on public colleges to move students through more efficiently, and some have been doing so. But experts say any recent progress is threatened by unprecedented state budget cuts that have trimmed course offerings.

"They will not graduate on time. I hope they will graduate at all," said David Baggins, who as chairman of political science at Cal State University-East Bay has been bombarded with requests for spots in already packed classes.

"Before," Baggins said, "there was always a way to help the student who really needed help." This year, "all I can do is say no."

Some students struggle for places in the core entry-level classes such as composition and math because the part-time instructors who typically teach those courses are the first to be laid off in tough times. Other students are shut out of crowded core courses in their majors by upperclassmen. Some upperclassmen face an even tougher road: The upper-level classes they need have been cut entirely because they aren't popular enough.

A federal study of 1999-2000 graduates found it takes students roughly 4.5 years on average to earn a bachelor's degree. About two-thirds of traditional-age college students who finished got through within five. A study of 2009 graduates is not yet complete.

In the 450,000-student California State system — the nation's largest public university system — the average is longer, in part because of large numbers of low-income, part-time and transfer students. A 2007 study of students who entered 12 years earlier found they took an average of 5.7 years. Officials say that number was probably falling slightly before the current cuts hit.

To help students get the courses they need to graduate, the University of North Carolina-Chapel Hill raised enrollment caps on some English and foreign language classes from 19 to 24. The University of Kansas also increased some class sizes — but offered fewer sections of a big introductory chemistry course. Both schools insist most students who truly needed a class eventually got in.

But at Central Oregon Community College in Bend, Ore., where enrollment has grown over 60 percent in the past three years, nearly 400 students don't have even one of the courses they requested. Many of the school's worker retraining programs consist of classes that are supposed to be taken in sequence, so students who can't get slots could be stuck until next fall.

The 23-campus Cal State system has raised tuition more than 30 percent, increased class sizes, laid off hundreds of teachers and cut thousands of class sections in response to a 20 percent state budget cut.

Around the country, the belt-tightening has made the usual begging and pleading with professors to make more space especially urgent.

"Some of them are more open — they understand you're trying to get into classes you need," said Haley Sink, a sophomore at Virginia Tech from Kernersville, N.C., who failed to get into several classes this year and hopes to avoid a fifth year of out-of-state tuition. "Others say, `I absolutely cannot handle more students.'"

Money isn't necessarily the only problem, some experts argue. Patrick Callan, president of the National Center for Public Policy and Higher Education, said universities focus too much on prestigious but unessential graduate programs at the expense of the undergraduate basics. Others want professors pushed harder to teach essential courses instead of their own boutique interests — and students to accept more unpopular, early-morning slots.

But some students say they are out of choices.

Sherrie Canedo, a fifth-year senior at Cal State-East Bay, was recently told she could finish her ethnic studies degree through independent study because most of the courses she needs were eliminated.

"I don't feel that's an acceptable way to learn," said Canedo, who is working two jobs and trying to string together enough financial aid to finish her education. "I'm paying to be taught in a classroom."

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Obama to unveil $12 billion community college plan

A July 14, 2009 Reuters article by David Alexander, "Obama to unveil $12 billion community college plan", outlines a President Obama plan for improving education in the United States with the "goal of having the highest proportion of college graduates in the world by 2020." Primary sources of economic growth are investment in education, physical capital (e.g., factories, roads, and power plants), and technology. So improving education should lead to increased future economic growth. According to the article:

WASHINGTON (Reuters) – President Barack Obama will unveil a $12 billion initiative on Tuesday to boost community colleges and propel the United States toward his goal of having the highest proportion of college graduates in the world by 2020, administration officials said.

The 10-year program, which he will announce during a visit on Tuesday afternoon to Macomb Community College in Warren, Michigan, includes a new goal of graduating an additional 5 million students from community colleges over the next decade, double the current number of expected graduates.

Education is the often-forgotten third pillar of Obama's economic plan and has received far less attention than the other two -- healthcare reform and renewable energy.

In a speech to a joint session of the U.S. Congress in February, Obama warned that the fastest growing fields of employment required more than a high school diploma, while only about half the U.S. population had graduated from high school.
He urged Americans to commit to at least one year of higher education or career training and set a goal of having the United States lead the world in proportion of college graduates by the year 2020.

Obama's Council of Economic Advisers issued a report on the future of the U.S. job market on Monday that was aimed at bolstering the case for more higher education.

"Well-trained and highly-skilled workers will be best positioned to secure high-wage jobs, thereby fueling American prosperity," the report said.

"Occupations requiring higher educational attainment are projected to grow much faster than those with lower education requirements, with the fastest growth among occupations that require an associate's degree or a post-secondary vocational award," it said.

Community colleges are two-year schools that generally grant associate degrees or training certificates. The annual cost of attendance is around half that of public four-year colleges and universities.

There are more than a thousand community colleges in the United States with more than 6 million students enrolled. Nearly half a million students graduate from community colleges annually.

Deputy Undersecretary of Education Bob Shireman said $9 billion of the funds Obama proposes to spend will go mainly for challenge grants awarded on a competitive basis to encourage community colleges to propose and launch innovative new programs.

Some of the $9 billion would fund programs to address the problem of students dropping out of college.
James Kvaal, special assistant to the president for education policy, said $2.5 billion would be used as seed money to generate $10 billion in renovation and construction at community colleges.

Another $500 million would be used to develop online courses and materials to improve student learning, including artificial intelligence tutoring and multimedia courses, Kvaal said.