While earning a college degree is still the best option for becoming financially successful, it no longer holds any sort of guaranteed financial payoff — indeed, a growing number of students may never put their Bachelor’s degrees to use.
In 2010, 17 million college graduates were categorized as underemployed — working jobs requiring a lower level of education or skills than what they were qualified for — according to analysis by Richard Vedder, director of the Center for College Affordability and Productivity, based on data from the Bureau of Labour Statistics.
We checked in with Vedder to hear his latest thoughts on the underemployment crisis, and the outlook is not bright.
“I don’t see anything right now on the horizon that is going to change things,” he says.
Simply too many people are earning college degrees each year for the job market to keep up, according to Vedder. An average of 150,000 new grads enter the workforce per month, creating far more highly-qualified job seekers than there are high-paying jobs.
And this process isn’t slowing down much if at all, Vedder says. A 2013 study by the Center for College Affordability and Productivity predicted that the number of college graduates entering the workforce each year will be more than double the number of jobs available that require at least a Bachelor’s degree.
Similarly, out of the 20 fastest growing occupations, only four require a Bachelor’s degree or higher, according to the CCAP’s 2013 study.
The skyrocketing price of college tuition coupled with a weak market for high-paying jobs will leave many graduates in deep debt for years. No wonder student loans are the fastest-growing kind of debt.
While Vedder believes that plans to relieve student loan debt are a step in the right direction, they serve as only a short-term solution to a long-term problem.
“To be a highly successful person in a financial sense of the word you still have to go to college, there’s no doubt about that,” Vedder says. “But it is true that the return on investment in a college education has declined. … The central problem remains that college costs are rising faster than people’s incomes are rising.”
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