Buyer’s remorse: High debt and low pay leave some college grads rueful

UNC Charlotte graduating seniors wave to friends and family. Americans with a bachelor’s degree earned less in real terms last year than in 1990, according to the New York Fed.
(David T. Foster III / TNS)

In the U.S., a college degree has usually meant financial security. But increased competition and overwhelming student debt are making that outcome less of a given.

That has spurred a feeling among many graduates that the qualification wasn’t worth the time, effort or money.

The brewing anxiety may burst into the open during the 2020 U.S. election campaign, when student finances are likely to be a key issue for Democrats. Among the party’s presidential contenders, Sen. Elizabeth Warren (D-Mass.) is promoting a plan that would make tuition free at all public colleges and universities, an idea also backed by Sen. Bernie Sanders (I-Vt.). Legislation on those lines has been introduced in the Senate and House, and has support from 2020 candidates Kamala Harris, Cory Booker and Kirsten Gillibrand.

In recent years, more Americans have completed college degrees — lowering their rarity in the workplace and eroding the wage premium they can command.


Americans with a bachelor’s degree earned less in real terms last year than in 1990, according to New York Federal Reserve Bank data. That has probably contributed to one of the findings from the Federal Reserve Board’s sixth annual survey of household economics: Just two-thirds of those graduates believe their investment in education paid off.

The Fed data show that a degree still makes an important contribution to financial stability. Adults with a bachelor’s degree or higher are more likely to be on solid footing, with 87% saying they’re doing at least OK financially. That compares with only 64% of those with a high school education or less.

Sentiment also splits by age: About 8 in 10 boomer-age adults say that the benefits of their bachelor’s degree outweigh the costs, while only about half of respondents younger than 30 — a generation in which degrees were more widespread — feel the same.

Of course, it depends on what you studied — and at what kind of school. Two-thirds of those with bachelor’s degrees from public and private not-for-profit schools see benefits as higher than costs, versus just half of those who attended for-profit institutions.

There are also disparities by race. The Fed survey found increasing levels of financial stability among whites and Hispanics with a college degree. That wasn’t the case for black Americans: 61% with a high school degree or less say they’re financially stable, and that reading remains the same for those who attended college. For whites, though, there’s an eight-point increase in financial stability — and it’s a 14-point gain for Hispanics.

Once out of college, the differences between racial groups narrow, with 89% of white Americans saying they’re doing OK money-wise, compared with 81% of Hispanics and 80% of blacks.

High costs are still keeping people out of higher education.

“Financial considerations, including costs being too expensive or a need to earn money, are the most common reasons” cited by two-thirds of young adults who didn’t attend college and 62% who didn’t complete their degree, the Fed found.


With the benefit of hindsight, 1 in 9 would have chosen not to attend college.