Four-year degrees have seen a marked drop in enrolment and completion rates in recent years. Learners are critically weighing the value of full degrees against typically shorter, less expensive skills-based learning, to quickly develop high-demand workplace skills. The investment in time and money – with no guarantee of work at the end – and the rise of skills-based hiring among employers are some of the key factors contributing to the decline in the perceived value of traditional degrees. In this information-rich Credentialate Guide, we ask – How much has the education landscape changed? What are the factors impacting enrolments? Where are learners going instead? And how can educators bolster the perceived value of degrees by connecting them more directly to work?
The Essentials: How Connecting Degrees to Careers Can Address the Decline in Degree Value
- How much has enrolment in full degrees declined?
In the United States, overall degree enrolment since the spring of 2020 has dropped by over a million learners and only 44% of respondents in a recent survey said that they intend to enrol in college in the next five years. The most notable shift was a 14% drop in teens saying they currently plan to enrol at a four-year institution today compared to before the pandemic.
- Why has the perceived value of degrees dropped?
According to a range of sources, learners are questioning the return on investment in both time and money of a four-year degree. Greater flexibility is also a driver, as learners may need to work around an existing part-time job or family duties. In comparison, skills-based learning can be completed faster, cost less and get them a job quicker. But 1 in 4 unemployed Australians have a degree, yet it isn’t leading them to employment.
- What is supplementing four-year degrees?
Alternative education – such as a MOOC, continuing professional education or micro-credential – offer shorter, more focused skills-based education that is job or role-based. Flexible formats (such as online or hybrid) enable alternative education to be completed remotely and are typically much cheaper. Employers are increasingly seeking skills over degrees, making them an attractive replacement – recent research shows that as much as 81% of employers believe they should focus on skills rather than degrees.
- Can alternative education deliver both hard and soft skills employers are looking for?
Employers are looking for job candidates who are willing to learn and possess transferable soft skills as well as verifiable hard skills. Alternative education can provide both. Additionally, engaging in shorter-form learning more frequently and over a longer time supports lifelong learning – benefiting learners and employers alike.
- What can educators do to address the decline in degree value?
We are currently at the point where a renewal and reset is necessary for higher education to remain relevant and compete effectively. Micro-credentials can be developed with industry. The path from learner to earner must be clear and existing career skills in the curriculum highlighted and recognised. Learners should be able to speak with confidence about their career skills (which according to our market research only 33% at present do) and be provided proof of what they know and can do that they can use in their career.
- How Credentialate provides a new perspective
As the world’s first Credential Evidence Platform, Credentialate helps you discover and share evidence of workplace skills. It creates a highly interoperable skills infrastructure that connects, collates and creates order from chaotic or dark data. It identifies skills in the curriculum, maps them to globally recognised skill definitions and aligns to frameworks. Institutions can manage and track skills attainment across the institution, against frameworks and see where improvements can be made. For each learner, a personal evidence record is created – as unique as every learners’ journey. Rich skills information, qualitative and quantitative performance data and links to artefacts of learning are baked into a verifiable digital badge that can be shared. This gives learners the confidence to speak to their strengths, the evidence to prove it and boosts their employability by sending a ‘ready-to-hire’ signal.
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The Full Story: How Connecting Degrees to Careers Can Address the Decline in Degree Value
- Enrolment and Expectations
- From Learner to Earner?
- Job Training vs. Career Training: Hard and Soft Skills Based Education
- Pandemic Proven Flexibility
- The Reality of Student Debt
- Organisational Lifecycle
- Reality and Alternative Credentials
- The Role of Higher Education In the Future
In countries like Australia, Canada and the United States where learners invest heavily both financially and time-wise in full degrees, there has been a steady decline in the perceived value of these degrees.
But as the COVID-19 pandemic forced learners around the world to confront a “new normal” that in reality is far from new, that perceived value took a literal nose dive. Why?
Well, it’s simple. The economic value and return on investment of a four-year degree literally begs to be questioned. Learners who graduate no longer earn significantly more than those learners who choose alternate forms of education. In fact, one in four unemployed Australians has a degree.
So are four-year degrees worth it? The question comes down to the evaluation of what degrees are for, and how they connect to a real-world benefit for learners.
It is important to add at this juncture though that some degrees are necessary and even essential to certain professions. They cannot be replaced with quick courses and micro-credentials, although perhaps they can be enhanced by them. Medical degrees, engineering, and law degrees all form a valuable foundation for careers filled with specialised knowledge.
We need better paths to full degrees and other learning though. Because while these degrees and others are still worth pursuing, the learner often does not share that perception. We must fix not only the issues with degrees themselves and ensure that they lead to employment, but we must address the PR image they are facing.
To understand this issue of perception, we will take a look at numbers and data, and the concrete issues higher education faces, and then we step back and see how connecting education to careers, not jobs, is the solution.
Enrolment and Expectations
First of all, we need to look honestly at enrolment numbers, particularly in the United States. Overall college enrolment continues to fall, down by over a million learners, since the spring of 2020.
But perhaps the most alarming of these statistics is that FASFA (the U.S. Federal application for student aid) applications are down as well, but down more for economically disadvantaged learners who would be eligible for more grants, money that does not have to be paid back upon graduation.
In other words, those learners who have greater financial needs are not even applying for aid, let alone enrolling in college. And among enrolments, the programs hit the hardest? The humanities and liberal arts. Some colleges are even changing requirements or eliminating English degrees altogether due to lack of demand. While novelists are pleading to keep them, colleges and learners alike don’t see the value.
“Everyone knows you can’t get a job with an English degree,” one learner told us. “Business, marketing, and STEM. That’s where the money is.” And if enrolments are any indication, she’s right. And although in a recent Strada survey only 44% of overall respondents intend to enrol in college in the next five years, those numbers are higher in those respondents with some college but no degree, black respondents, and younger respondents aged 18-34.
Another disappointing finding is that of those who said they would not enrol in college in the next five years, only 1 in 20 later change their mind and do enrol. That number rises to 1 in 6 for those who said they would enrol.
The question becomes of those who did not enrol when they intended to, why didn’t they? And why are only 1-20 of other respondents changing their minds and heading to school after all?
From Learner to Earner?
The question of why potential learners did not enrol in college comes down to the factor we mentioned earlier: the perceived value of education has dropped significantly over the last couple of years and was already in decline.
For example, in the spring of 2020, 60% of learners thought that a college degree would enhance their career. In fall of 2021, that number fell to 46%.
“Is a college degree worth it?” I asked Max, a student at University of Idaho. “I’m going to graduate this December,” he told me. “And I’m not even sure how to answer that question.” He went on to say that he thinks his degree improves his career choices, but “I really feel like to get anywhere in my field, I will need a Masters degree at least.”
A similar decline happens when you ask learners if college will help them get a stable job. Perhaps the most dramatic is the answer to whether or not a degree is worth the cost. In the spring of 2020, about 50% said yes. By fall of 2021? Only 32%, a decline of 18% in just 1.5 years.
When you look at learner outcomes in the light of actual financial returns, this bears out. A majority of learners in the United States (73%) attend institutions where a median graduate earns only $40-70K annually a decade after enrolling.
This corresponds directly to the rising scepticism and even anger about the shaky at best return on investment in a four-year degree. And the Strada survey mentioned above also supports this finding: only 10% of those who self-identified as intending to enrol but who thought college was not worth the cost actually enrolled, and none of those who self-indicated they would not enrol changed their minds and enrolled anyway.
And when it comes to perceived challenges to getting more education, cost topped the list with 57% of respondents listing it as the top obstacle. This has an interesting correlation in Australia as well where student costs are also rising. It’s hard to judge the exact impact, but international enrolments have dropped since the pandemic, and have not stabilised as expected since it has waned.
“Post COVID, there’s going to be a great deal of challenges for universities and financial challenges in particular. There’ll be a shakeup, I think, at a university level,” former federal education minister-turned-lobbyist Christopher Pyne said during a seminar hosted by the Australian Technology Network of Universities.
The takeaway: it appears that when it comes to believing that college is the best path from being a learner to becoming an earner, the learners and their parents (who often contribute to their education in one way or another) aren’t buying it.
But when they do enrol, why do they do it? And what programs are they enrolling in?
Job Training vs. Career Training: Hard and Soft Skills Based Education
Once upon a time, college itself was thought to enrich your career outlook no matter what degree you obtained. Even if you had a liberal arts degree, the thought was that it showed you could finish things, and that you would have a better, more well-rounded understanding of the world. Those things would make you a better employee.
Often, it worked. The soft skills that came from college, from critical thinking to communication skills, often served an employee well. However, as careers changed, so did the desires of employers. Now they were not just looking for soft skills and a teachable employee, but for verifiable hard skills as well, those that were directly career related.
And while there has been an interesting shift back toward transferable soft skills, the need for career-focused training is very real. Employers and learners both know it, and that is why there are fewer learners pursuing liberal arts degrees and more pursuing “hard” degrees in STEM fields, and why computer science enrolments have outpaced English degree seekers by a large margin.
That is why while enrolment in four-year colleges has dropped, enrolment in skills-based education has risen, and why learners are opting for shorter, more focused programs like bootcamps, specific courses at community colleges, etc. Quite simply, learners are looking for the quickest and cheapest route to a career they want to pursue long-term.
But the cost is not the only factor driving learners to alternate education solutions.
Pandemic Proven Flexibility
One good thing that came to education out of the pandemic is the proof that flexible, remote education is not only possible but in many cases preferable. And while schools like Arizona State University (ASU) and several Australian universities have been leading online education for a variety of disciplines for years, the rest of the world soon determined they had to follow.
Just like remote work, remote education opened doors for those who could not previously afford the stiff schedules and time constraints of on-campus learning. And it is this shift that Matt Lopez, Associate Vice President at ASU says has allowed “individuals who want education – who need education – [to] have access to flexible options.”
As a result, enrolments in Arizona colleges have risen over the last year and a half by 5%while other states have seen a decline. Only New Hampshire, Indiana, and New Jersey grew at similar or higher rates. That is largely because schools in their states, like Southern New Hampshire University (SNHU) also have leaned heavily on online education over the years.
When asked about factors that would most likely cause them to enrol in college, 56% of the respondents to the Strada study cited a flexible schedule. The reality is that college comes with two costs: time and money. Those who need it most tend to be short on one or both of those.
The other haunting reality for learners in the United States? Student debt, and lots of it.
The Reality of Student Debt
How much student debt do Americans owe? Well, that number is just north of $1.75 trillion at the time of publishing. How many people are impacted by that debt? Forty-six million. As much as Americans love their cars, that total is $440 billion north of the automotive debt total. In other words, aside from medical debt (an entirely different topic) the highest debt most Americans owe is in student loans.
And those students have some impressive totals. Somewhere around 55% of graduates in 2020 took out an average of nearly $30,000 in student debt, and 11% of the parents of those students took out an additional average of $34,000 in parent loans. But the average does not tell the whole story.
“I took out only about $12,000 in loans,” Jennifer tells us. “That’s because my parents helped a lot, and had a college savings account for me.” Her best friend Carolyn had a different experience.
“My parents couldn’t help me at all,” she told us. “I’ll be the first in my family to graduate college, but also the first saddled with some pretty big student loans.” Her total? The semester before graduating with her bachelors, she currently owes just over $83,000 dollars. “I could have a down payment on a house,” she said.
While much of the rest of the world has government programs that assist with college tuition and there are many places where it is free to the student, in the United States student debt is a reality for nearly every college graduate.
That doesn’t count graduate school or any advanced schooling. Sharon has a masters of social work she went into debt for when she found a bachelors in psychology did nothing for her career opportunities. “Bachelors and Masters combined? I owe just over $150,000. I’ll probably die with that debt,” she shared.
“Is it worth it?” she responded when asked. “I would have to say if I had it to do over again, I would get a different bachelors degree if I went to college at all. I would likely never enter this career field at all.”
In August of 2022, amid a lot of political pressure, President Biden did initiate a loan forgiveness program that would forgive up to $20,000 of some student’s debts in the United States. “It’s hard to be excited about it,” says Briana Ford of Columbia, S.C. who owes almost $60,000 in student loans. “I wouldn’t give it back, but it’s hard to be excited about it.”
And Sharon feels the same. “With as much debt as I have, I’m thankful, but it doesn’t feel like that much of a relief.”
In Australia, similar steps were also taken in 2022, along with an additional $1 billion in joint Federal-State funding for fee-free Technical and Further Education (TAFE) in 2023 and accelerated delivery of 465,000 fee-free TAFE places.
And governments are not the only ones responding. Schools with large endowments, like Princeton, are covering college costs for families who make under 100,000. While getting in to the prestigious private school is still a challenge, at least the cost to families will not be a factor.
Despite these efforts, the financial struggle of learners is real. And that contributes to the harsh reality that has certain employers scrambling to find qualified candidates in areas like social work and education. “I’m not making near enough to pay off my student loans and live comfortably,” Sharon said. “If it wasn’t for income-based payment plans, I would be sunk.”
What does all this mean? As the perceived value of degrees goes down and enrolment totals decline, it’s beyond time to look at the system currently in place to see what, if anything, can be done to “fix it.”
All of this traces back to the lifecycle of organisations and businesses. This cycle has been repeated over and over in education, but it’s vital to understand where we are right now.
Education as we know it today was not always the norm, but as it evolved, we have at times come to sustainable, mature points and points of renewal. But in the last few years, while we are seeing innovation in the space, there has been a decline in the traditional higher education model. We’re at the point where the innovation we are seeing must lead to a renewal.
In the startup or entrepreneur space, this is often called the innovate or die point of a business or industry. This can be illustrated by the publishing industry over the last decade, the music business, and others where there has been a significant pivot in the very type of business model that works.
It’s a time for renewal that will revitalise education and the confidence in the value of degrees and the viability of a four-year degree. It’s a simple thing to say, but a harder thing to achieve. But it can be done. In fact, all of the building blocks are already in place, and we’ve discussed many of them previously.
So let’s take a hard look at reality, alternative credentials, and what might be next.
Reality and Alternative Credentials
The truth is, when it comes to learners, those who know about alternatives to four-year colleges are likely to take that route as an alternative, especially in the United States. “I’m joining the military to get my education,” Andy, a U.S. Naval recruit told us. “I can’t afford college, my parents won’t help pay, and I don’t want to graduate with a bunch of debt.”
“I chose trade school,” Craig, a student in the welding program at a community college in southern Idaho told us. I don’t want to wait four years to enter the workforce, and welders make good money.”
“I chose to go to work for Apple for one reason,” Sabrina, a developer in Cupertino told us. “They didn’t require a degree, and offer ongoing training. They’ll even repay me for college classes if I do decide to take them. I can make good money now, while I go to school, rather than later.”
The move towards alternative education has been fueled by the fact that learners found during the pandemic that they could learn from home rather than in a classroom, that there were viable alternatives to university and traditional colleges, and those programs had one thing in common – they would connect them directly to a career path.
The above study shows a decline in those pursuing degrees in fine arts for one reason: there is no clear career path. As valuable as these degrees are in reality, they have done a poor job of showing learners a clear career path.
“I dropped out of my English degree to study marketing,” Julie told us. “No one gets a good job with an English degree.” While businesses often do value those degrees, they don’t make that value clear to learners.
“The types of skills that the labour market is currently rewarding through increased earnings for those with more education are believed to include abstract problem solving, critical thinking, and effective communication,” according to Lynne Texter, Ph.D. of La Salle University. “If liberal arts colleges, or liberal education more generally, are doing a better job of improving their graduates’ skills in these areas, and these are the skills that are being rewarded in the labour market, we should be able to see this in the earnings data.”
But this is not always true, and the fact that employers do value those degrees is not communicated well to learners.
Instead, their parents and others discourage the pursuit of a liberal arts education. “When I got my undergrad in psychology,” Jenna, a suicide prevention counselor told us, “I knew I would need at least a Masters to land a worthwhile job. A bachelor’s in psych doesn’t really mean much.”
When we interview learners we see that the connection between education and a career matters to them, but that more importantly the understanding of that connection matters even more. Those who chose alternative credentials and alternative education have a solid understanding of where their hard work will lead.
Does this mean college degrees no longer have value? Has their value actually gone down? The answer is clearly known as a quick perusal of job listings on nearly any career site will show. So how do universities and institutions confront this decline in value head on?
The answer is right in front of us. Connect education and degrees to careers, and help learners see their value. How do we do that?
The Role of Higher Education In the Future
If confidence in the value of degrees is down, and surveys tell us enrolment will follow, what educators do next is critical. Connecting degrees to careers, no matter what the degree, is critical to institutional success.
That means the learner must see the value of the degree and what it can and will do for them in a real-world career. The path from learner to earner must be well-lit and clear. But perhaps more importantly, it is the perception of learners that must be impacted. The value of a degree was once never in question. To achieve that level of confidence again, colleges must embrace change.
In practice, this starts with cataloguing skills and going beyond the traditional evidence record. Skills learned and their relevance to the learner must be clearly visible and understandable. A common language of including Rich Skills Descriptors (RSDs) is recommended to bridge the gap between educators and employers.
This requires, at least in part, an evaluation of current curriculum and the skills already contained within it, including inter-departmental duplication. It’s time for education to get more efficient and embrace the technology that is available to do so.
Learners are adapting to a new career normal. To remain relevant, education institutions need to do the same.
The startling decline in confidence in the value of a four-year degree shows the scepticism and in some cases even anger about the lack of connection between degrees and careers. When the path from learner to earner is not entirely clear, learners and their parents opt for alternative credentials.
While this attitude does not hold true worldwide, there is growing scepticism everywhere regarding certain types of degrees, especially those in the fine arts. All of this is despite the value employers and others put in higher education of all types.
That means it’s time for higher education to confront the decline in the perception of degree value head on: connect degrees to careers, learners to earners, and back it up with data. When this happens, confidence in degrees can return, and learners will once again see the value in a four-year education.
Education in its current state has peaked and reached a decline. A turnaround is in order, the time for innovation is now, and the future is filled with growth and opportunity. It will take a new vision of how educators, employers and learners work together – and active collaboration to make it happen.
How Credentialate provides a new perspective
As the world’s first Credential Evidence Platform, Credentialate helps you discover and share evidence of workplace skills. It creates a highly interoperable skills infrastructure that connects, collates and creates order from chaotic or dark data. It identifies skills in the curriculum, maps them to globally recognised skill definitions and aligns to frameworks.
Institutions can manage and track skills attainment across the institution, against frameworks and see where improvements can be made. For each learner, a personal evidence record is created – as unique as every learners’ journey.
Rich skills information, qualitative and quantitative performance data and links to artefacts of learning are baked into a verifiable digital badge that can be shared. This gives learners the confidence to speak to their strengths, the evidence to prove it and boosts their employability by sending a ‘ready-to-hire’ signal.
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