Employers seek alternatives to college degrees

“Depending on whom you ask, degrees are either increasing in value or about to disappear into the dustbin of history,” writes Ryan Craig, managing director of University Ventures, on EdSurge News. Employers are “demanding more degrees while simultaneously saying degrees don’t matter.”

A new report by The Brookings Institution shows that the bachelor’s degree premium remains as high as ever. Meanwhile, Goldman Sachs says the return on college is falling: “In 2010, students could expect to break even within eight years of finishing school. Since then, that has increased to nine years.”

One third of employers are asking for more higher education, according to a new survey from CareerBuilder. Some are demanding four-year degrees for jobs that used to be open to high school graduates or demanding master’s degrees for jobs that used to require a bachelor’s.

Others have found “degree bias” leads to bad hiring decisions.

. . . Google’s Senior VP of People Operations has gone on record saying that grades in degree programs are “worthless as a criteria for hiring.” As a result, Google also requires candidates to take assessments, which are much more predictive of success on the job.

Credential inflation and openness to alternative credentials are logical responses to employers’ dissatisfaction with college graduates’ hard skills and soft skills, such as reasoning, communication, complex problem solving, innovation and creativity, writes Craig.

Soon, a “plain vanilla bachelor’s degree” won’t be enough. “Newly minted bachelor’s degree grads are already competing in the job market with graduates of coding bootcamps like Galvanize,” he writes. “Soon they’ll be competing with graduates of Udacity Nanodegrees, Coursera Specializations and Lynda Learning Paths.”

A New York Times editorial argues that the government should help more people go to college, even though “the economy does not produce enough jobs that require college degrees.” The Times‘ solution is for the government to create “good jobs at good pay” — and raise the minimum wage.

Oddly, the editorial says graduates can’t find jobs as teachers, ignoring the debate about whether the teacher shortage is national or just local. There’s always been a surplus of would-be elementary teachers and strong demand for math, science, bilingual and special-ed teachers.

U.S. grads are weak in math

U.S. college graduates lack numeracy skills compared to graduates in other countries, concludes the 2013-14 Program for the International Assessment of Adult Competencies.

Overall, U.S. adults met the international average in reading skills and fell below average in math, according to PIAAC. Americans did worse in math than adults in Japan, Finland, Estonia, Cyprus, Canada . . . it’s a long list. 

U.S. high school graduates knew as much math as high school dropouts in other countries, writes Jenny Anderson in Quartz.

In “problem solving in technology-rich environments,” also known as digital literacy, Americans were dead last.

“This is not a high-level test of math or critical-thinking skills,” Stephen Provasnik, a research scientist at the National Center on Education Statistics, said. PIAAC measures “basic workplace skills.”

Blacks graduate in lowest-paying majors

Black college graduates are likely to choose low-tech majors that lead to low-paying jobs, according to a report by Georgetown’s Center on Education and the Workforce. Twenty percent of black students major in human services and community organization (median earnings of $39,000). They’re also over-represented in social work ($42,000), early childhood education ($38,000) and psychology.

Few major in engineering, science or math. Those who do often choose the lowest-paying speciality, such as biology for black women and civil engineering for black men.

Early childhood education, one of the lowest-paying majors, is a popular choice for black students.

Blacks are more likely to major in the “caring” professions, such as early childhood education, which lead to low-paying jobs.

Two-thirds of black college graduates are female, which surely explains some of the lean toward the “caring” and underpaid professions.

In addition, most black graduates have attended an open-admissions college that may have limited majors and inadequate counseling, the report observed.

Many Americans — and especially those who are the first in their families to attend college — think any degree guarantees a decent job and a middle-class life. Someone should tell them they’ll have trouble repaying student loans for a non-technical degree from an unselective college.

Beyond college rankings

Which colleges and universities add the most “value” to a graduate’s paycheck? Brookings’ value-added rankings analyzes the difference between students’ predicted and actual mid-career earnings.

Cal Tech, MIT and Stanford do well, but so do Rose-Hulman Institute of Technology in Indiana, Colgate in New York and Carleton College in Minnesota.

Two-year colleges with high-value added scores include the New Hampshire Technical Institute, Lee College near Houston, and Pearl River Community College in Mississippi.

U.S. News rankings imply that Harvard graduates do well because they went to Harvard, notes Liz Shaughnessy. But these schools “primarily admit rich, smart students . . . who may have done well at any college or university.”

In contrast, Brookings Institution focuses on the value-added boost that these schools actually provide their graduates when controlling for such factors as student’s wealth, their academic profiles and their majors. Depending on government and private sources, the think tank analyzes the difference between actual alumni outcomes (like salaries) and the outcomes one would expect given a student’s characteristics and the type of institution.

Cal Tech alum with 10 years of work experience, for instance, earned 49 percent higher salaries than would have been predicted, with the average grad earning $126,200. Grads from Colgate, a liberal arts college in upstate New York, were earning slightly more at $126,600, which is 46 percent more than would have been predicted.

Colleges rank higher if they encourage high completion rates, offer generous financial aid and produce more graduates in engineering, health care, computer science and business.

The ranking also looks at graduates’ ability to repay their student loans and the salary trends of alumni’s occupations.

College pays — but not much for some majors

Recent college graduates who majored in psychology, social work or the arts earn a median income of $31,000, according to From Hard Times to Better Times, a new report from Georgetown’s Center on Education and the Workforce. The median salary of workers with only a high school diploma –including experienced workers — is $32,000.

New humanities and liberal arts graduates earn a median of $32,000. Education majors start at $33,000, on average.

On the flip side, new engineering graduates average $57,000 a year.

Of course, college graduates are likely to move up the salary scale as they gain experience, leaving most less-educated workers behind.

Unemployment rates are declining for college graduates — except for communications and journalism majors, the report finds. College graduates have maintained their earnings advantage over high school-only workers, who are earning less. However, “a full recovery in the employment of college graduates, especially at the Bachelor’s degree level, may be as far off as 2017 and a full recovery in earnings may take longer,” the report concludes.

Employers: Grads aren’t ready for workforce

College students nearing graduation think they’ll be ready for the workforce, but employers aren’t so sure, reports the Chronicle of Higher Education.

A report by the Association of American Colleges and Universities shows the discrepancy between students’ and employers’ views.

Four-year graduates’ wage advantage over high school-only workers hasn’t changed much since 2000, writes Rob Valletta for the Federal Reserve Bank of San Francisco’s Economic Letter.  Increasingly, the “labor market favors workers with a graduate degree.”

Is that mindless credentialism — or too many four-year grads with weak skills?

Wage gaps compared with high school graduates

Wage gaps compared with high school graduates

More graduates are working less

Recent college graduates are struggling to find jobs. 

They earned a degree and then …

Many college students don’t work very hard or learn very much, concluded Richard Arum and Josipa Roksa in Academically Adrift. For their new book, Aspiring Adults Adrift, they followed 1,000 graduates for two years after college. A little over a quarter of graduates were earning $40,000 or more and 53 percent were unemployed, employed part-time, or working full time for less than $30,000.

That’s scary.

After college, parents still pay

Most college graduates aren’t financially independent — at least not right away — reports a survey by Sallie Mae. Nearly 85 percent of parents plan to offer their children monetary aid after graduation.

Almost one-in-three parents plan to provide their grad with financial assistance for up to six months, and around 50 percent plan to foot bills anywhere from six months to more than five years.

Tough love will help young adults grow up — and protect Mom and Dad’s retirement, advises Dennis Miller on MarketWatch.

Nothing can screw up retirement plans like supporting adult children after you’ve shelled out tens of thousands of dollars in college tuition, shuttled them back and forth for Thanksgiving and Christmas breaks, and maybe purchased a new computer for all that research and writing they did (or maybe didn’t do) over four-plus years.

It’s not just the lousy job market, writes Miller. “Social norms have shifted so that accepting help from Mom and Dad well into your 20s is ‘OK’.”

Parents, do not borrow to pay for your child’s college education, advises Robert Farrington on Forbes. If it’s necessary to take out loans, the student should do the borrowing.

Via Cost of College.

Grads are too optimistic about jobs

The class of 2014 is overly optimistic about their job prospects. Only 18 percent of 2014 graduates expect to earn $25,000 or less, but more than 41 percent of 2012 and 2013 graduates are earning salaries in that range