Getting A College Education Is Still Worth the Cost

It’s a new year and typically a time of anxiety, hope and change. Among the goals many have this year is to improve their personal finances – that single mom balancing work and raising her children, the middle-aged worker who lost his job due to industry obsolescence, the young adult who went straight to work and foregone college.

Change is always greeted with apprehension but perhaps one way to improve your personal finances is to consider going back to school to get that college degree. A University of Hawaii Economic Research Organization (UHERO) report, titled “Estimating the Returns to Higher Education Using Administrative Data: A Case Study of the University of Hawai‘i System,” shows a degree from the University of Hawaii system raises wages, increases intergenerational mobility and reduces labor market obstacles that those from poorer households face.

This report confirms what many other national studies have about the benefits of having a college degree. But the report is significant to locals in Hawaii because it shows you don’t have to go to the mainland for a college education and incur higher out-of-state tuition costs. But that your college degree earned from the University of Hawaii system will have the same or similar benefits as most mainland college degrees.

Nationally, we see that college enrollment has gone done since the COVID-19 pandemic. The National Student Clearinghouse reports undergraduate enrollment dropped 8.9% in the past four years. UHERO reports this trend is also true in Hawaii.  After the pandemic the U.S. college enrollment rate fell by 4 percentage points, to 62%. In Hawaii it fell by 5 percentage points. “The Hawaii public school college entrance rate currently sits at 51% — the lowest point since 2010,” the report said.

College is too expensive
The biggest obstacle that many say to getting a college degree is cost. According to College Board data, in 2023, the average cost of attendance at an in-state, four-year public institution was about $23,000 a year. At private colleges that amount is typically more than $53,000.

Why is college so expensive now? Experts point to several reasons: 1) many state legislatures have slashed education funding, according to the National Education Association; 2) student services – on-campus healthcare, mental health services, career counseling, etc. – while valuable they increase college’s operational costs, according to the American Council of Trustees and Alumni; and 3) the post pandemic recession has made everything more expensive, including the cost of education.

Strategies to get a college degree at a lower price
The sticker price of tens of thousands of dollars for one year of education looks daunting and impossible for some to pay for. But there are strategies that could help.

1.) Get federal student aid by filling out the Free Application for Federal Student Aid (FAFSA). A Brookings Institute report found that one in seven students enrolled in a college were eligible for financial aid but never completed FAFSA.

2.) Attend a local college that is reputable and proven to be worth the money. Again, this is where the UHERO report proves to be invaluable.  In-state tuition cost and not having to move (which can be very expensive) can save a student a lot of money.

3.) There are many scholarships and grants available to all kinds of students – needs based, merit based, background-based, industry-based, etc. One local program to look into is the Hawaii Promise. More than 2,200 students from seven UH community colleges benefited from almost $5 million in Hawaii Promise scholarships in the school year 2021-2022.

4.) Work study programs. There are federal work-study programs through FAFSA. There are many jobs on campus or work study programs through nonprofits.

5.) Employer tuition assistance. Some companies will help pay for your tuition for a commitment that you stay with that company upon graduation for a specific number of years. For certain tech and healthcare majors, whether you are currently employed in that industry or pursuing it, employer tuition assistance could be available.

Experience over education
There is a growing belief that job experience would produce greater returns and fewer costs than higher education, the UHERO report said.

This belief is particularly true among many working in Silicon Valley and other tech hubs. Many well-known billionaires and not-so-well known multi-millionaires are college dropouts. In the tech industry, it’s true that experience at the right companies can in fact be more valuable than a college degree.  But how many of us are tech geniuses? Really!

Today’s job market is changing at a dizzying speed. In a practical world perhaps the tech industry is right – that skills-based hiring through experience makes more sense and could be more valuable than skills acquired in college. Furthermore, there is validity to criticisms that over certification is at times ridiculous for performing tasks that can obviously be learned on the job.

But most industries still require a post-secondary education as the gateway for advancement, higher pay and job opportunities even in today’s increased capital on skills-based hiring.

To our Filipino parents, keep encouraging our youth to pursue higher education because as the cliché goes, it still pays off in the long run. But students must be smart about choosing a career that you’re both passionate about and that will be financially relevant in the next 20, 30 years.