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Is Degree Inflation Real–and What’s My Degree Worth Today?

collegedegree1With the tightening of the labor market and high unemployment rate making major headlines in recent years, many people are well aware of the woes that job applicants face today. Some new college graduates with mounds of student loan debt to pay off are unable to find a job in their field; meanwhile, others who have been working without a degree in their field for many years have been finding that those same positions now require a degree. With so much emphasis on the rising cost of college tuition and the struggle of those with a degree to find a job in their field, many people are wondering if they may be witnessing serious degree inflation. They want to know if it is still worthwhile to go into debt to get a bachelor’s, go back to school to get a master’s or professional degree—or if they should simply head out into the workforce to establish experience.

What Is Degree Inflation?
Degree inflation, which can also be termed “academic inflation,” relates to the practice of employers increasing their minimum job requirements; it may also refer to the value of certain degrees changing over time—often lessening—and the rising cost and competition of college degrees (according to the Economist, college fees have risen faster than Americans’ ability to pay them). Often, these practices are closely related and together form a more complete definition of degree inflation.

Evidence of degree inflation is found in a couple different areas. For instance, positions that did not require a bachelor’s degree as a minimum requirement in years’ past may now have this requirement. In other cases, employers may require advanced degrees (such as master’s degrees or professional degrees) for positions which would normally require a bachelor’s degree. In some cases, the compensation for the position may be commensurate with the education requirements, but many employers may be taking advantage of a larger pool of job applicants to find the most skilled and qualified for the position. In order for applicants to be considered for jobs in a tight market, they often need to have advantageous or advanced qualifications over other applications.

Positions That Have Been Most Affected By Degree Inflation
One study from Broken Glass, a firm that regularly analyzes trends based on information in online employment ads, provided an eye-opening look at the positions that have been most affected by degree inflation. The data analyzed included the percent of positions requiring a bachelor’s degree in both 2007 and 2012. The top positions affected by degree inflation based on this study included dental lab technicians, chemical equipment operators and tenders, medical equipment preparers, buyers and purchasing agents of farm equipment, and electronics engineering technicians.

It is important to note that while some of these positions may now have more advanced skill requirements, others simply have the advanced degree requirement in place to take advantage of the oversupply of workers. Employers may be including the degree requirement in job descriptions as a means of narrowing down the pool of applicants initially.

The Value of a Degree Today
With some positions that did not require a Bachelor’s or Master’s degree now requiring one, many people are left wondering what the value of a college degree is actually worth today. One key part of this analysis involves comparing the cost of the degree versus the starting salary for the field after graduation. Clearly, the starting salary for a teacher may be far different than the starting salary for an engineer. According to data supplied by the State Council for Higher Education for Virginia, the starting salary for an application with a systems engineering degree in 2013 was $60,300. With a degree in mathematics, graduates could expect to earn about $45,777. The lowest paying field was in biology with a starting salary of $27,209. While the cost of a college education can vary significantly from institution to institution, the average cost of in-state tuition at a public school for the 2012-2013 school year was about $23,000—meaning that degree inflation may disproportionately affect students whose degrees land them salaries near $20,000.

Despite the news that college tuition is rising and the pool of qualified graduates is growing, recent graduates (and current employers) need not worry about their futures just yet. While some students are beginning to fear that their degree may be useless, research still shows that any type of college degree—even just an associate’s degree from a community college—will drastically increase earnings over a lifetime.

According to one study out of Georgetown University, the difference in lifetime earnings was greatest between those with less than a high school or a high school diploma ($1.30 million) and those with a Bachelor’s degree ($2.27 million). While there is some discrepancy in lifetime earnings between those who hold a Bachelor’s degree and those who hold a Master’s, the difference is less pronounced. The difference in earnings between a bachelor’s degree and an advanced degree may also depend on the type of degree offered. An advanced degree in Engineering, Law, or a Master’s in Business Administration, for instance, may yield a higher return on investment than a Master’s in English Literature.

When to Get a Degree
While degree inflation has been a problem for some professions, other professions have been relatively untouched by degree inflation. It is important to first establish your career goals before deciding on the need for a degree or a more advanced degree. Once you have developed a five or ten-year career plan, you can then take a closer look at current job requirements for those positions. Always take a forward-thinking approach so that you can work on your educational requirements now for a position that you would like to have five or ten years down the road. Clearly, there are some financial benefits to getting a degree, but the degree should also be aligned with your own career objectives and goals.

Guest writer Esteban Bieter understands how difficult it is for recent college grads to find a job due to the impacts of degree inflation, as has seen an influx of people turning to professional certifications. For young people looking to pass the CompTIA exams and become computer technicians, he recommends using A+ certification study materials from Total Seminars.

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