But fewer people might be going to college for the right reasons: There are better opportunities elsewhere. “When the economy stinks, people often try to hide in a classroom,” says economist Ryan Sweet of Moody’s Analytics. “The number of job openings now is higher than in recent memory. So the decline in college enrollment is generally a sign of a better economy.”
If high-school grads are bypassing college in favor of minimum-wage jobs with no obvious future, that’s not necessarily a favorable development. But if they’re finding jobs in decent-paying fields such as construction or manufacturing, or signing up for technical training programs that might take a year or two to complete, that ought to be good news.
College isn’t for everyone, and when the economy is healthy there are plenty of jobs that don’t require a four-year degree yet provide relatively good opportunity. In some industries there’s a shortage of workers with skills that don’t require a college degree, such as welders or medical technicians. It’s hard to tell why more young Americans are bypassing college, but if they’re starting careers in fields where demand for certain workers is strong, that would be good for the economy and the individual both.
Worries about a punishing amount of student debt is probably another factor in the decision to forego a college degree. Study after study has found a college degree still leads to considerably higher lifetime earnings, on average, despite college costs that have risen faster than inflation for years. Arecent study by the New York Federal Reserve, for instance, found college grads earn 51% more than those with a high school diploma. And some college education is better than none, as long as you complete the program: Those with a two-year associate’s degree also out-earn the lowly high-school grad, though by less.
The real problem with student debt these days may not be the debt itself but the shortage of decent jobs that allow recent grads to pay off the debt. A new study by the Brookings Institution argues that gloomy tales of college grads drowning in debt are anomalies that exaggerate the problem. “Although there are surely individual borrowers facing financial hardship due in part to their student loans,” Brookings found, “the overall health of the student loan market is not nearly as dire as many popular narratives seem to suggest.” Soon we may be able to say that about the job market for young workers, too.
Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.
Fewer head for college–which might be a good thing | Daily Ticker – Yahoo Finance.