Does a Degree Really Help in Business?
In most cases it still pays off, but that could change in the near future
Madison is a smart town. More than half of adults here have at least a bachelor’s degree, and per a recent study from online brain teaser company Lumosity, we’ve got the thinking skills to match the diplomas. But school smarts alone do not guarantee success in the business world; with rising costs, experts agree that it’s important to consider multiple options. A recent Brookings Institution study found that, on average, the lifetime benefits of earning a traditional college degree still outweigh the costs, but a few factors—namely the selectivity of the school, the school’s graduation rate and the major a student chooses—make a big difference. But as alternative education options like free or low-cost massive open online courses (MOOCs) proliferate, that $100,000-plus piece of paper might not mean the same thing for our kids’ and grandkids’ generation as it has for ours.
U.S. Adults with a Bachelor's Degree or More
DATA: Pew Center
Unemployment and Annual Earnings by Education Level
What Americans currently owe in student loan debt
Madison’s rank among the smartest U.S. cities, based on scores on Lumosity brain teaser games
1 in 5
of 853 schools in a PayScale study offered a negative return on investment
DATA: U.S. Bureau of Labor Statistics; U.S. Census
Dr. Miguel Corona
Founder of AdMentis Latino Talent Solutions, a talent management consultancy
Does having a degree play an important role in the search for a job?
Yes, absolutely, it’s still a requirement for many organizations. I think what has changed is the type of degree you have. Bachelor’s is fine; master’s is better. And of course it depends on the industry.
Any changes in education trends you’ve noticed recently?
It’s always been the colleges and universities that educated people, but now you have different options, like MOOCs [massive open online courses], for example. And they’re starting to change the model a little bit.
How do employers respond to new models of education?
The issue with that is accreditation and value. That’s still something that’s getting worked out. An employer can say, ‘You took an online course, that’s all fine and dandy, but I don’t see it on your transcript.’ But once that credibility is established, I think from a higher ed standpoint, they’re going to lose a lot of students because of the cost.
Are there certain industries more willing to look at experience over a degree?
Technology-based firms will be a little more open to taking somebody that might not have that traditional degree if they know how to do the work.
What can people who are out of work do to increase their chances of landing a job?
As the job market improves, more people enter the job market, which floods the market. The way to differentiate yourself is to make sure you come back with skills that show a commitment to lifelong learning, which could be an advanced degree or a certification or online classes.
Invest in Ed
With the rising costs of college, planning ahead may do wonders in avoiding sticker shock. One investment option is a 529 college savings plan. They carry tax incentives and are state-run, but U.S. citizens can join a 529 from any state. This is a relatively new way to save for college, says Jim DiUlio, director of Wisconsin 529 College Savings Program, which includes a plan called Edvest. “The industry ha
s evolved,” says DiUlio. “Things aren’t the same as they were five years ago. It’s easier.” One recent change? The initial payment to open an Edvest account shifted from $250 down to $25 last fall. The money is good toward a range of institutions, including community college, technical school or graduate school, and anyone with a Social Security number can have a 529 plan, grown-ups included. Maybe now’s the time to put aside money for that degree you never got or a master’s to bump you up a rung on the corporate ladder. “And if you don’t use it, you don’t lose it,” says DiUlio. The money in a 529 plan can be transferred to another family member.
Grace Edquist is associate/web editor of Madison Magazine.