Is university worth the cost?

“If a man empties his purse into his head, no man can take it away from him. An investment in knowledge pays the best interest.” So said Benjamin Franklin, one of the US Founding Fathers. More of us than ever before are emptying our purses into our heads – this year, outstanding US student loan debt stood at a staggering $1.2 trillion, bringing it close to the GDP of Canada. What’s less obvious, though, is whether that investment is really paying off.

The Economist was already sounding the alarm bell back in 2012. While American colleges made up 80% of the world’s top 10 universities at the time, more and more people were starting to question whether it was worth the hefty price tag: “Rising fees and increasing student debt, combined with shrinking financial and educational returns, are undermining at least the perception that university is a good investment.”

The path to fulfillment

So is higher education still the gateway to a better, more rewarding and financially secure future? The recent Gallup-Purdue Index put that question to those who should know best: graduates. They asked more than 30,000 US graduates to share their experience in an attempt to understand two things: do universities provide enough opportunities and experiences to justify their high fees, and do graduates leave with the skills they need to find a good, well-paid job and lead healthy, fulfilling lives?

The findings raise questions as to the sustainability of the current higher-education model. When asked to rank whether their education was worth the cost  on a scale of 1 to 5 – with 5 being “strongly agree” and 1 “strongly disagree” – 50% of respondents went for 5 and 27% for 4. But 23% of graduates gave a score of 3 or less, meaning almost a quarter did not feel they got value for money. The results are even more worrying for private for-profit universities: only 26% of their graduates strongly agreed that the education they received justified the fees they paid.

And while the purpose of university is to open up new opportunities, the findings suggest many indebted graduates are having to put off other projects. Almost half of recent graduates (48%) said they had delayed postgraduate education because of their student loan debt and 19% said it had forced them to delay setting up their own business.

But the results aren’t all negative, and actually provide a glimpse into policies that could ensure students get value for their money. Facilitating student relationships with professors and mentors would be the best place to start. Graduates were almost twice as likely to strongly agree their education was worth the cost if they felt their professors had cared about them and made them feel excited about learning, and if they had a mentor who encouraged them to pursue their goals and dreams. They were also less likely to say their student debt had stopped them from pursuing personal, business and education goals after graduating.

Have you read?
Why college shouldn’t have to be for everyone
Which countries have the lowest graduate unemployment?
Which is the world’s most innovative university?

Author: Stéphanie Thomson is an editor at the World Economic Forum.

Image: Students take their seats for a graduation ceremony. REUTERS/Brian Snyder