College costs way too much. If this is the first time you're hearing that, you've obviously just woken up from a 30-year slumber. Welcome back. Sorry we screwed everything up while you were sleeping.
Mike Rowe offers a pretty spot-on assessment of the situation in higher education today. The popular Discovery Channel mainstay and champion for American workers of every collar color observes that "We are lending money we don't have to kids who can't pay it back to train them for jobs that no longer exist."
Well I guess when you say it that way, it does sound like we're rowing a slow boat to Hell.
But Rowe isn't exaggerating. The numbers don't look good. According to Business Insider, the cost of college increased by 260% from 1980 to 2014. Tuition and housing for a four-year, post-secondary institution would run an average kid $9,438 the year Ronald Reagan was elected to office. The very same things tallied up to $23,872 in 2015.
For $23K, you could buy a brand new car every year for four consecutive years. You could buy 20,000 used books and teach yourself the secrets of universe. For $23K, you could literally spend a full third of each year just taking Carnival Cruises.
I don't know that any of these is a great investment in your future, but then again, I don't know that college is a great investment in your future either. In fact, if your future is likelier to be in a practical trade than at a desk, I can pretty much guarantee that college is a bad investment for you.
But that's actually a good thing. Count yourself among the lucky ones, because if you have a talent for craftwork, the future looks pretty bright.
And it'll be a lot easier for you to see the light because you won't be working in the cold shadow of mountainous student loan debt. Skilled tradesmen and women are enjoying a surge in career opportunities just as an array of economic factors are eroding the presumed value of a college degree. This is not to say that a college degree is not valuable, just that it's not valuable to everybody. If you are a candidate for trade school, you will not only come by your professional certification at a far lesser cost than your college-educated peers, but you're also far likelier to find immediate and well-paying opportunities to ply your craft.
In the discussion hereafter, we'll consider the twin impact that skyrocketing tuition and diminishing job opportunities have had on the presumed value of a college degree; we'll address the ever-improving value proposition of trade school enrollment; and we'll examine the way that these trends are intersecting to shape the job market of the future. Consider this a case, not against the idea of attending college, but against the idea that everybody should attend college. You may be the type of person to benefit most from an investment in trade school. Then again, you may be the type of person to benefit most from four month's worth of cruises. We're not here to judge.
But if you think you could truly thrive by learning, honing, and practicing a skilled trade, read on. We've got all kinds of good news for you.
The College Slump
College enrollment is slumping. An article in the Wall Street Journal points out that America's colleges enjoyed one single, steady uptick in growth for roughly 375 years. Between 1636—when Harvard College first opened its doors—and 2010, the number of students attending college rose from just a small handful of economic elites to more than 20 million Americans.
For nearly four centuries, you could count on enrollment in America's colleges and universities to continue its climb. Those days are over, and perhaps even forever. According to the National Student Clearinghouse, enrollment in college declined every single fall between 2011 and 2016. Enrollment peaked at 20.6 million in 2010, but by autumn 2016, the official count was much closer to 19 million.
Granted, much of the waxing and waning of enrollment numbers could be tied to the boom and subsequent contraction of the for-profit sector, as well as basic fluctuations in the college-age population size. But community colleges, boutique campuses and even a good number of traditional four-year institutions experienced statistically (and economically) significant enrollment drops.
At the bottom of these trends are two fairly indisputable economic conditions. The cost of college continues to rise while the value of a degree continues to erode. This dichotomy leaves little doubt about why so many young Americans are seeking their opportunities outside of the university.
For all the prestige of the college tradition, it is the profile of the trade school that is rising today. In 2014, the District of Columbia-based College Savings Foundation released its fifth annual “How Youth Plan to Fund College” survey of high school students nationwide, including, for the very first time, an inquiry regarding trade schools. The survey revealed that 21% of respondents were "considering" career or vocational schools in lieu of college. Beyond the fact that one-in-five students was seriously considering this avenue, the very fact that the survey about “college” financing included this question demonstrates the brightening spotlight on the trade school as a viable and financially attractive alternative to college.
In the 2017 edition of the survey, questions regarding vocational school were phrased somewhat differently. Most notably, the findings in the more recent survey revealed that 39% of all respondents were considering alternatives to traditional four-year colleges based strictly on the cost factor. Of those, 9% were now considering vocational options in lieu of college. Kids in the so-called "Generation Z" demographic are not simply drawn to trade schools by virtue of their abilities and interests alone. Increasingly, the cost of college is pushing those who previously viewed themselves as university-bound students to reconsider the assumption altogether.
Is College a Bad Investment?
Not necessarily, but it's not necessarily a good investment either. You must first ask yourself whether or not college is a good investment for you and you specifically? Not to force an issue to which you've probably already given a tremendous amount of thought—possibly during long, sleepless nights—but where do you see yourself in the next five years?
Do you see yourself in a cubicle, in an office, in a boardroom? Or do you perhaps see yourself in a workshop, at the site of a building project, or in a large, well-lit room humming with innovative technology?
If it's the latter, then college just may not be for you. Before you get bummed out by that proposition, consider some of the following trends.
According to the Consumer Price Index, the cost of college climbed 74.5% between 2000 and 2016, an era notably intersected by a crippling economic recession. Add to that a grand total of student loan debts for Americans that topped $1.3 trillion in 2016. Even if you haven't studied economics in college, you probably realize that these trends are not particularly promising.
And with an estimated 40% of college graduates enduring sustained underemployment in the so-called “gig economy”—largely working in roles that don't require a college education like Uber, Starbucks and GrubHub—student debt is the one area where we're really seeing any kind of growth.
Wall Street Journal points to an array of inflationary trends in the value of a college degree. With nearly one-third of all Americans in possession of a Bachelor's Degree, the document in and of itself no longer sets apart job candidates. The vaunted reputation of a university or the completion of a sought-after degree can still be immensely valuable. Attending an Ivy League college or earning a degree in mechanical engineering remain excellent paths to future success. But of course, such opportunities are limited to the most elite academic candidates.
What about a liberal arts degree from a modestly-regarded state university? Back in the mid-70s, only 1% of America's taxi drivers were college graduates. By 2015, 15% of taxi drivers had a Bachelor's Degree folded into the glove compartment.
Historically, one of the strongest arguments in favor of a college education was the average annual earnings differential for those holding a Bachelor's Degree versus those with a high school diploma. Leading up to the late 20th century, this differential was subject to sharp and steady growth. Adjusting for inflation, Wall Street Journal places that differential at $19,776 in 1975. For the generation graduating four-year colleges in 2000, that differential was $32,900. The arguments in favor of going to college were pretty strong for those with the academic wherewithal to succeed. The earning differential was significant enough even to justify student loan borrowing.
But this once reliable indicator is now part of the disquieting trend. In 2015, the average earnings differential for college and high school graduates was $29,867. This is still a notable differential, but its downward trajectory is big, bright, red flag. It's also not a number that stands alone. For student borrowers, this differential is eroded by the cost of repayment. None of these factors alone suggests that college isn't worth the money, at least in principle. But taken together with the rising cost of school, the picture is not particularly rosy. The assumptive value of a college degree is under attack by too many variables.
All of this makes a compelling case. If you are already working in jobs outside of your academic focus, and largely persisting on gigs that never require you to mention your Bachelor's Degree, you might consider learning a trade. This is a path that could open the door to a wide world of better paying gigs that also don't care where you went to college.
Trade Schools On the Rise
Let's start with a quick definition of terms. A trade school is a specialized educational institution that allows you to pursue a course of technical education related to a specific skilled vocation. Common courses of study include mechanical, electrical, automotive, carpentry, plumbing and other “shop” skills. But trade schools may also include fields as diverse as culinary arts, music production, broadcasting, graphic design, computer programming, fashion design, cosmetology, and filmmaking. In the field of healthcare alone, from nursing to administration of an ever-growing array of medical technologies, trade skills are in demand.
Though a great many trades may fit under the trade school umbrella, what they have in common is a direct line to a specific set of skills and a specific career orientation. In addition to providing a course of study that dispenses with extras like electives and liberal arts studies, trade schools tend to offer hands-on training and even pathways to apprenticeship.
By trimming the academic flab and creating a clear runway from which to launch a career, trade schools are typically designed to deliver an individual from enrollment to certification in two years. You really can't beat that for efficiency. If you're looking for an education focused on personal growth, enrichment, socialization, and academic variety, go to a liberal arts college. All of that stuff is the reason it takes four years minimum, and that's totally cool if it's what you're looking for.
On the other hand, if you're looking to master a skill and hit the ground running, trade schools usually don't waste your time with mandatory art history classes and giant pep rallies. Get in, get your training, and get on with it.
There's a natural appeal to this, particularly as the costly investment in a college degree becomes an ever more counter-intuitive way to begin making a living. Sageworks, a financial analysis firm, revealed that trade schools are enjoying trends that are exactly the inverse of those currently plaguing the college sector. From 2006 to 2007, revenue at trade schools saw collective growth of 5% to 6%. In the year between 2013 and 2014, that number was 12%. The U.S. Department of Education reports that while there were roughly 9.66 million students attending trade schools in 1999, an estimated 16 million were enrolled 2014. In other words, trade schools are adding students roughly as fast as colleges are losing them.
And the rising cost of a college education seems like a pretty strong endorsement of this trend. As noted above, the gap between college grads and high school students is still quite significant. Less significant though is the earnings differential between college grads and trade school certified professionals. The National Center for Educational Statistics reports that technical and trade school jobs offer a median annual salary of $35,720. A Bureau of Labor Statistics report places the number at $46,900 for those with a Bachelor's Degree. While this doesn't account for wide variances for both, or for variances in growth opportunities, the gap of $11,180 is pretty modest. It becomes even more modest when you consider that most trade schools require two years of study toward certification, as compared to the minimum of four years generally required for a Bachelor's Degree. For what it's worth, more than 60% of students will not graduate in four years.
And what is it worth? Well, The Simple Dollar reports that the average Bachelor's Degree will cost $127,000, as compared to the $33,000 average cost for a trade school degree.
This has a tangible impact on your immediate economic prospects as you depart school for the working world. As of 2012, the average college student carried a debt load of $29,900, not even accounting for interest (which is not an insignificant sum of money). The average debt load for students graduating from two-year technical school is closer to $10,000.
Back By Popular Demand
It's not just that trade schools are more affordable and more efficient. It's also that they point toward growing job markets. More than a few recent liberal arts graduates can tell you that this has not been their experience exactly. There aren't a whole lot of philosophy or political science majors who find themselves the target of corporate headhunters on graduation day.
On the other hand, America is actually in the middle of a pretty serious skills shortage. Skilled trade positions are plentiful. Less plentiful are the men and women with the qualifications to fill them. The world's future economy will tilt on the realities of automation, for better and worse. On the better side of things is the expectation of greater convenience and efficiency. On the worse side, more American workers will be replaced by robots.
Here's the upside though. If you know how to build, program, operate or repair those robots, the world is your oyster. According to the Bureau of Labor Statistics, while 7.8 million Americans were listed as unemployed in the summer of 2016, there were also 5.8 million unfilled jobs. Employers simply couldn't reconcile the gap between the skills needed to fill those jobs and the qualifications of most applicants.
And this gap is only projected to widen. The BLS forecasts that the construction industry, which crested $338 billion in value in 2016, will grow by 13% in the decade between 2014 and 2024. This will create 180,100 new jobs. Pair this with the workforce exodus of retiring baby boomers, and we could be looking at a construction labor shortage in the range of half-a-million jobs.
An article in Plastics Today—speaking of the sharply growing demand in its own field—acknowledges this trend, pointing out that “While many graduates will have a difficult time finding work because they chose a career path where there is more supply than demand of employees, ‘manufacturing companies are crying for workers to fill the shortfall of two million skilled workers that are projected to be needed over the next 10 years for much higher paying jobs.' This same phenomenon applies to universities, which often graduate hundreds of students with degrees in areas of low demand, and very few in areas of high demand.”
So to recap, college is getting more expensive, and college-educated jobs are getting scarcer. Meanwhile, skilled trades are in high demand. For every Bachelor of Arts out there driving an Uber, there's a building project without a good welder.
Once again, it is important to acknowledge that for its declining value, the Bachelor's Degree may still be the very best option for the right set of conditions. The lifetime earnings for those with a Bachelor's Degree remain greater, and the opportunities to both further one's education and apply those credentials to escalating future prospects also remain greater. But the changing job market of the immediate future is rushing toward a head-on collision with the skidding college sector. There are compelling reasons to go to college, especially if you excel academically, if you have meaningful access to financial assistance or scholarship opportunities, if you are in a position to attend one of the nation's top universities at a discount, or if you plan to pursue a course of study with plentiful and tangible job opportunities.
But the negative indicators surrounding the cost of college and the value of a degree may be diminishing the percentage of aspiring candidates in such a position. For those in the middle and lower tiers of the college student hierarchy, the argument in favor of trade school enrollment grows far stronger.
And as the job economy of the future takes shape, we have cause to forecast that this argument may yet grow even more compelling.
The takeaway is ultimately that higher education remains an absolutely essential way to improve your opportunities in this economy and over the course of your lifetime. However, the form that this higher education takes may fit under a broader set of definitions than ever before. From tuition-free colleges, to the world's top online schools, to the rising sector of American trade schools, your path to success may not be in a traditional college.
As the value of a college degree stumbles, the value of a trade certification is only going up. The relationship between these two trends is something more than a coincidence.