Higher education is an economic bubble that is massively overvalued in America. The Americans believe that higher education gives them an advantage in the job market. Based on the American dream, people are oriented to work hard in whatever endeavors they find relevant. Apart from better housing, good medical cover and other factors of better living standards, education is a factor considered to be special in the society. In fact, most Americans not only apply for higher education, they also consider the name and rating of the academic institutions of their choice. Universities are classified according to the quality of education they offer. In most cases, the costs of acquiring higher education vary from one institution to the other. Since the Americans dangerously overvalue higher education, they strive to get opportunities to study in superior universities. However, the Americans should realize that higher education is not the only way to success.
Education is believed in intensely in the United States. People trust in the higher education for the better future. Based on the concept, many people strive to go for the four-year university education despite the higher costs. In most cases, parents struggle to sponsor their children through higher education. The main intention behind the efforts is based on the ideology that higher education provides better employment opportunities in life. Since universities and colleges differ in ranking, it is believed that the students who attend superior universities have better chances than their counterparts.
Americans as a group should not pursue college as a sound investment. Most Americans spend a lot of money on education so as to achieve their dreams. Different Americans invest in education for various reasons. Moreover, people have a great passion and value for college and university degrees. In fact, the majority of Americans are willing to overspend money provided they acquire the best higher education. I think the entire move is an investment bubble because the price for education cannot compare to the returns.
Economic frustrations with high rates of unemployment have shaped the public domain. Higher education used to be a very good venture in the past. In fact, citizens who pursued higher education landed in prestigious and lucrative jobs earning above average income. Traditionally, education was used as a guarantee to safeguard against unemployment. Based on the College Board, the cost of studying in college has increased extremely over the past 20 years. Although individuals who acquire higher education are well placed to secure good jobs, the time to pay back all the investment in college is growing. Based on the concept, the efficiency of college education is questionable.
Americans should think into the concept of over investing in the higher education. Besides the apparent financial risks, success is not only measured in terms of money. There are various college dropouts like Bill Gates and Mark Zuckerberg, whose lifestyles should serve as examples to the young people. Some students spend large sums of money for college pursuing higher education studies and struggle in life trying to recover back the funds. In the current learning platforms, college studies have become less about the actual learning of skills and more about paying money to acquire degrees. Many college graduates do not demonstrate significant learning improvements after going through the higher education programs. In case college studies were to serve as a sound investment, all the students should graduate with hands-on skills. In fact, there are some fields of study that need skills more than graduation papers. Since there is a great misconception about higher education in America, many people rush to colleges without acquiring information about its quality and return on investment.
As in the case of speculative stocks, higher education investment is esteemed by Americans. For some investors, college education has a payoff. However, many others will eventually face that higher education is a mistake. Students who perform well in high school have a higher probability of graduating from good universities. The students on good standing may find the cost of attending universities fair and financially worthwhile.
Apart from the students who score extremely well in high schools, Americans should realize that there are other better investment opportunities than higher education. For other individuals, investing in higher education is not profitable. Statistics shows that about 40% of first year higher education students do not complete the four-year degree program even after six years. On the other hand, students who major in courses with low vocational demands normally encounter problems getting jobs. Due to the changes in time and growth in the number of college attendants, the number of graduates tends to outgrow the available job positions. The quantity of job openings in managerial, technical and professional areas, where the college graduates want to work, are limited. Consequently, there are numerous college degree holders who work as taxi drivers and bartenders among other jobs.
As the cost of acquiring higher education rises, a mismatch between college graduation and labor market reality rates also persists. Avoiding higher education does not necessarily mean than non-degree students should immediately work. There are various investment opportunities that can serve the Americans better than flocking in colleges. There are many paths to success that a young American can follow during his transition to adulthood. In fact, only a few life careers call for a four-year degree after high school.
From 1978, the cost of higher education has risen by 1120%. Apart from the tuition, the table shows percentage rise in the cost of other related items such as medical care, shelter, food and consumer price index. Based on the percentage rise, investing in higher education is currently associated with a longer payback period.
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