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Your Take: Is a College Degree Worth It?

A topic that came up often at the start of the recession was the value of a college degree. As the cost of college skyrockets, people are wondering if it really makes sense to put off earning power for four years and pursue higher education. It makes for a prime candidate for a Your Take! 🙂

One of the more recent and better articulated reasons in favor of a college degree comes from our friend Chris Farrell [3] (I reviewed his book New Frugality and he’s a regular on Marketplace Money), writing for Bloomberg BusinessWeek (a great publication with iPad support, kudos!). A good counter argument comes from a more dated article, back in late 2009, but the arguments presented in the Time Business article [4] are also compelling. I think the answer will depend on your particular situation, what degree and at what cost, but neither side is definitively “right.”

I personally think the right college degree is like a defensible moat. Why are lawyers so highly paid? Because they have a moat. You need to pass the bar, which usually means you need to go to law school, and that usually means you need money or access to loans. Why are the list of the highest paid jobs mostly engineers? You will usually need a degree, it’s hard to learn that stuff on your own, and college is a pre-requisite. College degrees provide a moat for those who can get one, protecting them against competition from people who haven’t earned the degrees or learned those skills.

If you work in retail, you are competing with almost everyone for your job. That doesn’t mean you are any less valuable, it just means that you face a lot more competition. A high school graduate will not compete with a law school graduate for a clerkship, the law school graduate competes with a much smaller pool of candidates. Your local Starbucks barrista competes for his or her job with almost every other person looking for a job – that’s a lot of people.

Do you think college degrees are worth it?