The Federal Reserve in its Report on the Economic Well-Being of U.S. Households in 2019 measures well-being by education attainment. What they found is those with a B.A. or higher value their education more than those with lower education attainment.
B.A. holders valuing their education the most is, of course, consistent with the labor market reality that those with a four-year degree or more work more and earn more than those with lower education attainment.
This was true during and after the Great Recession. Those with a four-year degree or more lost their jobs the least during the Great Recession and went back to work the quickest post-Great Recession. And the wage premium grew larger between those with a four-year degree and those without. That pattern is repeating itself in our current pandemic-driven economy.
What B.A. holders valuing their education the most is not consistent with is the story we are told year after year that getting a four-year degree is no longer worthwhile. Those with a B.A. don’t buy that story at all!
Specifically, the Fed asked survey respondents who attended college: “Overall, how would you say the lifetime financial benefits of your most recent educational program compare to its costs?” The response: 31% with some college or technical degree thought the benefits of their education were greater than the costs; 48% of those with an associate’s degree said the same; and 69% of those with a bachelor’s degree or more valued the lifetime financial benefits.
When asked about changes they would make to earlier education decisions, only 5% of those with a B.A. or more said they would not attend college or get less education. Fully 35% said they would have completed more education.
This compares to 69% of those with an associate’s degree who said they would have completed more education and 76% of those with some college or technical degree who said the same. So large majorities of those who attended college but without a B.A. say they did not get enough education. They also don’t believe the oft-told story that pursuing more education is no longer worthwhile.
What about those who took out student loans to fund their post-secondary education? One of the reasons given for a four-year degree not being worthwhile anymore is perceived high debt loads. But the majority of 18-to-39-year-old B.A. holders who took out student loans don’t believe that.
Of those ages 18-39 who have paid off their student loans, 93% with a B.A. or more say they are doing at least okay financially. That compares to 71% of those 18-39 with some college or a technical or associate’s degree who have paid off their loans.
For those 18-39 still paying off a student loan, 76% with a B.A. or more say they are doing at least okay financially compared to 53% still paying off a student loan of those with some college or a technical or associate’s degree.
The economic well-being report provides data on why those with a four-year degree or more value their education more than those with lower education attainment. They have higher income: 43% of those with a high school degree or less, 58% of those with some college or a technical degree, 67% with an associate’s degree and 84% of those with a B.A. or more had household income in 2019 of $40,000 or more.
So it is clear that those with a four-year degree or more value their education more than those with less education. Their life experience is that they are better off financially because they have a B.A., including those who took out a student loan.
And they are giving that message to their kids. The report finds that 72% of those ages 22-29 with at least one parent with a bachelor’s degree have a B.A. This compares to 35% with a B.A. of those 22-29 with at least one parent with some college but neither with a bachelor’s degree, and 19% of those with both parents having a high school degree or less.
We need to be giving this message to all of Michigan’s children. Ending the disparity in college attainment rates is essential to living up to the core American value of an equal opportunity for all.
Are there some with four-year degrees who struggle economically? Of course. Are there some without four-year degrees who are economically well off? Also, of course. That said, the data are clear: there is no path to class and racial equity that does not include much higher bachelor’s degree attainment for those who grow up in non-affluent and/or non-white households.
Lou Glazer is president of Michigan Future Inc.