Why College May Not Be the Best Choice for Your Education Dollar

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college graduate unemployment
The traditional route to career success follows a pretty straight academic line: hard work in elementary school, followed by hard work in high school, followed by hard work at the best college you can afford. Vocational education, on the other hand, is often treated as a consolation prize -- the second-best option for the second-best kids. But for a new generation facing rising college tuitions and high post-graduate unemployment, old-fashioned vocational studies might offer the best chance at a solid career and a lifetime free of debt.

According to a recent survey, 50% of recent college graduates are unemployed or underemployed; many, in fact, are resorting to the kinds of entry-level jobs that they went to college to avoid. In a recent Chronicle of Higher Education article, economist Richard Vedder tried to explain why: He sees America as facing a glut of college graduates, as the supply of people with high priced degrees exceeds the demand for them. Noting the large number of college grads occupying manual labor positions, he argued that their average wages -- which dropped by 4.17% between 2008 and 2010 -- were likely to continue to fall.

A Better Option

Meanwhile, things are looking up for skilled workers, demand for whom remains strong. As a recent CareerBuilder survey reported, 40% of employers complained that they were unable to find sufficient skilled workers to fill their available positions. This is particularly striking in manufacturing, where employers are heavily targeting foreign workers and military veterans to fill open positions. For students who can get into the programs that prepare them for such jobs, the employment future could be promising.

Not surprisingly, the demand for skilled workers has driven up their wages. According to a 2012 study by Georgetown University's Center for Education and the Workforce, 39% of men with an educational certificate earn more than men with an associate's degree, and 24% earn more than men with a bachelor's degree. For people in a STEM field -- science, technology, engineering or mathematics -- things are even better. According to another study by the Center, 63% of STEM workers with associate's degrees make more money than the average person with a bachelor's degree in the humanities or social sciences. Similar discrepancies exist across all levels of educational attainment, suggesting that what a student studies may ultimately matter a lot more than how long he or she studies it.

Finding a Good Vocational School

As demand for skilled workers has risen, so has enrollment at vocational schools ... and the tuition of many programs. Even so, trade schools and community colleges can be a bargain when compared to traditional four-year colleges. According to the Department of Education, the average cost of a year's tuition, room and board at a four-year college is $20,986; at a two-year school, it's only $8,451. Added to this, it takes a lot less time to complete a program at a trade school or community college, so the full cost of a program of study, on average, is $67,482 less at a two-year school.

But the value of a vocational program varies greatly. Many private companies have jumped into the market, hoping to tap into the rich river of federal student aid money flowing into the trade school market. Unfortunately, many of their programs are overpriced, unaccredited, or lack strong placement programs, which means that students who enroll in these for-profit schools' programs can easily find themselves graduating with a lot of debt and few job prospects.

Luckily, there are several ways vocational students can protect themselves from choosing a bad program. The first step is ensuring that the program they're considering is accredited: The Department of Education has an easy-to-use accreditation database.

Having checked to see that the program carries a U.S. government seal of approval, the next step is ensuring that its benefits are worth its cost. Companies like Glassdoor and Salary.com can give a good idea of the likely salaries that graduates of a particular program will garner. Depending on this, students can calculate the amount of money that they can reasonably expect to borrow. A general rule of thumb is that your loans shouldn't exceed one year's post-graduation salary.

Another great resource is Department of Education's default rate database, which reports on the percentage of students who default on their loans. Schools with high default rates may be charging too much for a particular certification.


Aspiring utility workers train at Oakland's Cypress Mandela Center and Workforce Institute. (Getty)

Bumps on the Road to a Vocation

One of the problems facing vocational students is a lack of government leadership when it comes to funding. Despite President Obama's outspoken support of post-secondary vocational training, there has been a distinct gap between the his rhetoric and his administration's policies. In its 2012 budget request, the Department of Education cut funding for career and technical education by $263.8 million, more than 20%.

On the other hand, the Obama administration was far more generous toward traditional college education. In the same year that it slashed spending on vocational training, it increased financial aid to college students by 29% and added a 35% increase to its tax breaks for college students.

Put another way, the federal government spends over $166 billion on student aid and over $14 billion on tax benefits for college students, but only $1 billion on vocational education.

Yet, government lassitude aside, the demand for skilled workers is continuing to rise, bringing higher salaries in its wake. In other words, for students who are willing to do the necessary research and planning, community college and trade school, once the neglected children of the American educational system, are starting to look like really good bets.




Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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Mitch Labuda

I attended a Vocational High School, taught a trade and skills. Attended college for a short time, did not graduate from college. These articles read more like a list of do's and don'ts about do's and don'ts. I was taught to think what you wanted to be in life and get a job that reflected that. Foolishly, I didn't think about the future and bought in to the dream that one spends all of our life's in one job. Workers need to be versatile and able to change and shift in the job market, which is not static. Learning a skill, like, critical thinking is an asset. Hoping to graduate and make a career from one job skill, wishful thinking.

August 13 2012 at 8:53 AM Report abuse rate up rate down Reply
Charle

I have come to the conclusion that colleges are much more about collecting money from students and their families than about educating the student.

August 13 2012 at 1:14 AM Report abuse rate up rate down Reply
Conrad Sr.

Was D of O for a large company...had HS and Junior college (2 year) employees doing responsible jobs that college graduates could not do...

It's the individuals and some kids just do not fit in the criterias that they took in college....

They should do what the military does...Test them to see what they are most capable to do...Of course some parents want their kids to be Lawyers, doctors and etc....Even though they are not qualified to be so....

It's all about money (stupid)

August 12 2012 at 10:13 PM Report abuse rate up rate down Reply
exnavy2003

i have been saying this for easily the last 20 years and now the "EXPERTS" have finally figured this out.Just amazing--I became an electrician and am 52 and been retired for 6 years now and none of my friends from college are retired or even close to retirement--Not many kids today want in the trades because its hard physical work,you work outdoors in all kind of weather and you have to analyze and be a good troubleshooter and have a good work ethic.Its a shame because as an electrician,plumber or ac/r guy--you can get training,become a hjourney man and if you started at 18 and by the time the person is 28--He can once becoming a master electrician say--start hois own business--not many colleges prepare you that well for life and then you have huge college loans.The trades arent for every one but they can be for a lot of people anyhow

August 12 2012 at 9:57 PM Report abuse rate up rate down Reply
shiloh1388

I went to Wichita State University and George Washington University, to finish my undergrad. Establish residency requirements in Kansas, then apply to Wichita State. It is a large city, so you can also have a decent paying part time job, if you want one, while working toward your degree. The tuition is a very, very good deal. GW is in the Nation's Capitol, and admittedly living in DC is among the most expensive cities in the world. you are going to have to be extremely resourceful and think outside the usual humdrum options, unless your parents are very wealthy. If so, then enjoy. GW is great.

August 12 2012 at 7:47 PM Report abuse rate up rate down Reply
caboranches

KIDS FOR THE LAST 42 MONTHS HAVE BEEN DROWNING IN DEBT FROM COLLEGE WITH THIS MUSLIM CLOWNS NO JOBS CREATED IN THE LAST 42 MONTHS~~HEY MUSLIM CLOWN~~WHERES THE FARKIN JOBS ? ? ? ? NOTHING BUT RECORD UNEMPLOYMENT FOR THE LAST 42 MONTHS N 23 MILLION AMERICANS "STILL" OUT OF WORK. ! !

August 12 2012 at 3:21 PM Report abuse +1 rate up rate down Reply
crimeslawyer

Since when is going to college all about getting a job?

August 12 2012 at 12:21 PM Report abuse +2 rate up rate down Reply
wp41e

Ok. What's wrong with this article other than it states the obvious.

"Finding a Good Vocational School." The public schools have been closing them down for decades either as a cost cutting measure, because "everyone is going to college" or because of their past reputation as a baby sitting service for trouble makers. Those that remain offer few choices and are in materially poor condition and lack modern equipment and technology so that option is closed. ... The "for profit schools" have slightly better offerings but are ridiculously expensive. They seem to only be interested in your student loan application than they are actually teaching anything.

August 12 2012 at 10:43 AM Report abuse rate up rate down Reply
jekap55

Good article. I would take issue with one fact, namely the cost of college. I have three college age kids. My oldest graduated from Dartmouth last year. The cost of tuition, room and board was over $57,000 per year. My middle child attends Vanderbilt which costs nearly $60,000 per year and my youngest attends a SUNY (New York state school), which costs over $20,000 for in state students. My kids have done quite well, but there is no way in hell that any of this was worth the money. I am by no means wealthy, but I received no help from any of the schools, despite being disabled for almost two years when my daughter was starting college. I guess I'm a doting parent or a fool's fool or both. At any rate, this idiocy cannot continue indefinitely. I wonder what the end game will be?

August 12 2012 at 9:53 AM Report abuse rate up rate down Reply
1 reply to jekap55's comment
shiloh1388

I think you should look at my comment above. good luck!!! Rockin' the black and gold. Go Shockers!!!

August 12 2012 at 7:49 PM Report abuse rate up rate down Reply
AIDA G. BONSUKAN

Germany rates vocational schools so high that their country has so much excellent , skilled workers and they earn as much or more than a college educated person. The US government musy support vocational schools as their graduates will advance and improve manufacturing in this country.

August 12 2012 at 9:24 AM Report abuse rate up rate down Reply