Will College Pay Off? A Guide to the Most Important Financial Decision You'll Ever Make

A very useful, hard-headed, and focused book, Will College Pay Off? covers exactly what that title promises. Peter Cappelli looks deeply into higher education as an economic proposition for would-be students. As such, this should be handy for a lot of people, at least in the United States. The answer to that titular question is: it depends (that's actually the subtitle for chapter 3). Cappelli is serious enough and well grounded in the literature to not offer flip answers. "[C]ollege per se isn't a clear pathway to a good job." (172) To an extent it depends on major, but also on the job market following graduation. Liberal arts degrees (as in well-rounded and interdisciplinary, not necessarily humanities degrees) are one good way to maximize value, he argues, since they often lead to higher lifetime earnings (lower in the first job, but better in the second and following). One major theme of the book is that many of our discussions about college's benefits stem from a specific historical moment, whose time is now passing. Cappelli notes that the idea of companies hiring graduates for the skills they learned in college is really a post-WWII development (12-15), depending on the huge postwar expansion of higher ed, and its relatively low cost. High ed has ballooned since then into something much larger, and is now increasingly expensive. This observation helps explain a lot of intergenerational tension over higher education, by the way. "We can understand why politicians don't want to say it, but unfortunately, education is just not a panacea for the difficulties that individuals now face in the job market." (187; emphasis added) Another, wonkier theme is that the college premium may not be all it's cranked up to be. That term refers to the likely lifelong earnings boost one gets from having completed colleges (as opposed to sticking with, say, a high school diploma). Some studies find this premium to add up to a half million dollars for men, which makes even high student debt seem like a good deal. But Capelli thinks the premium is inflated, especially because of a recent development, whereby college grads compete with non-college grads for jobs that don't require a BA/BS (93). Moreover, the types of people who tend to achieve an undergraduate degree often have "advantages before he or she even starts college as compared to the average high school graduate" (93) - i.e., they have better K-12 schooling and/or more social capital and/or are wealthy or otherwise privileged. On top of that, the college premium research is based on a different historical moment (see preceding paragraph). A major takeaway is that choosing a major for post-graduation job prospects is often a losing game. All too often too many other students make the same decision, which then depresses wages and/or reduces the number of available jobs in that field. It's a regular boom/bust cycle. (44) The efforts to press public universities and colleges to turn out more students in the fields that employers say they want... is a fool's errand... [T]rying to predict what will be hot in the labor market several years in the future is almost impossible.(157)In fact, majoring in a seemingly lucrative field only to see opportunities wither upon graduation can lead one straight to a second career, and hence the strength of liberal arts programs. Cappelli insists that companies say "what they want from recent graduates is less about classroom knowledge and more about experiences outside the classroom" (186). Another takeaway: colleges and universities aren't necessarily well skilled at preparing students for employment. Some - many - don't publish useful data about post-graduation careers (72), with the notable exception of St. Olaf College. Not all offer a comprehensive support network, including tutoring and testing for course placement (76). A few hundred schools offer science master's programs and other co-op programs, which Cappelli finds to be actually really useful. Will College Pay Off? is almost wistful in its admiration for what sounds like old-school schooling. Listen to this conclusion:Maybe the appropriate alternative is to let college do what it is good at, which is educating rather than training, focusing on knowledge and life skills rather than job skills, and to find connections into the job market through other paths.(173)But Cappelli immediately follows that with "Those paths might be low-paid, entry-level jobs, possibly boot camps or practical skills taught elsewhere, or even unpaid internships." Another useful bit of advice to students: maximize job experience while at college, including internships and summer jobs (52, 160). Employers often complain about new hires lacking basic job survival skills. Cappelli thinks we need more apprenticeships - which can reduce the amount of postsecondary education, and are also lamentably thin on the American ground (65). Plus aim for grants, which tend to lead to better academic results than loans or work-study (132). I did enjoy Cappelli's dry sense of humor. This appears right from the start: "The problem is, none of those people saying that more kids should go to college are offering to pay for it." (5) Or: The famous Ivy League is actually an athletic league bound together by a set of principles that effectively limit the role of sports on campus. (129-130) And this: "For a majority of colleges, the annual return on the investment in attending has been around 7%, which may sound great, about what the stock market earns, but the interest rate on unsubsidized student loans is also about 7%." (180) So what's not to like? Cappelli's narrow focus sometimes leads him to miss some really useful point. He just touches on competency-based programs (86), which seem to have a lot of potential for improving one's passage through universities. He addresses policy implications late in the book, and doesn't cover them enough. His advice for academic institutions is scant. That said, Will College Pay Off? is a fine book for parents of prospective students, and those students. Policymakers and campus leaders might find this a bracing inspiration.