Two-thirds of American employees regret their college degrees

Two-thirds of employees report regrets about their advanced degrees, as Americans question the high cost of higher education.

Student loan debt has ballooned to nearly $1.6 trillion nationwide in 2019, topping the list of regrets for employees.

Science, technology, engineering or math majors, who are more likely to enjoy higher salaries, were least likely to report regrets, while those in the humanities were most likely.

A college education is still considered a pathway to higher lifetime earnings and gainful employment for Americans. Nevertheless, two-thirds of employees report having regrets when it comes to their advanced degrees, according to a PayScale survey of 248,000 respondents this past spring that was released Tuesday.

Student loan debt, which has ballooned to nearly $1.6 trillion nationwide in 2019, was the No. 1 regret among workers with college degrees. About 27% of survey respondents listed student loans as their top misgiving, PayScale said.

The findings illustrate why education loans burdening millions of Americans have become a hot-button issue among some Democratic presidential candidates. Most recently, Sen. Bernie Sanders on Monday proposed a plan to impose a tax on Wall Street trading and use the proceeds to erase that $1.6 trillion of debt.

About 70% of college students graduated with student loan debt this year, averaging about $33,000 per student. And as younger grads pay off student loan balances, they're struggling to accumulate wealth or are putting off purchasing homes — some millennials are even struggling to purchase groceries. 

It's not just millennials. Baby boomers are taking on student loan debt either to help cover college costs for their children or to retrain themselves for a workplace transformed by increased automation, cloud computing and other labor-saving technologies. Some Americans age 62 and older are using their Social Security benefits to pay off more than $86 billion in unpaid college loans.

Major bummers

College debt was followed by chosen area of study (12%) as a top regret for employees, though this varied greatly by major. Other regrets include poor networking, school choice, too many degrees, time spent completing education and academic underachievement.

Most satisfied: Those with science, technology, engineering and math majors, who are typically more likely to enjoy higher salaries, reported more satisfaction with their college degrees. About 42% of engineering grads and 35% of computer science grads said they had no regrets.

Most regrets: Humanities majors, who are least likely to earn higher pay post-graduation, were most likely to regret their college education. About 75% of humanities majors said they regretted their college education. About 73% of graduates who studied social sciences, physical and life sciences, and art also said the same.

In the middle: In between the other two categories were 66% of business graduates, 67% of health sciences graduates and 68% of math graduates who said they regretted their education.

At least one sector of employment bucked the trend: Teachers and other professionals in education, which isn't typically a high-paying profession, were the second-least likely, after engineering grads, to have any regrets tied to their major, with 37% saying they had no regrets.

Generational differences

Broken down by generation, older Americans were more likely to report that they have no regrets about their education. Among baby boomers, or 51% said they have no college regrets, making them the only demographic with a majority reporting no regrets. In contrast, just 37% of Gen Xers and nearly 29% of millennials reported no regrets.

Millennials, who are most disappointed with their college education, have the highest number of employees regretting their student loans. About 29% of millennials regret their student loans, while only 26% of Gen Xers and just 13% of baby boomers regret the loads they took on for college.

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Walmart Models Next-Level Business-Education Partnership

This time of year especially, high school graduates wonder, is college really worth it? Employers wonder that too. Yet, we rarely hear about employers working with educators to ensure that students learn employable skills. Walmart’s new Live Better U program offers insight into the benefits such business-education partnerships can provide.

In general, students have good reason to be worried about their return on college investments. According to a 2017 survey by Gallup and Strada Education Network, 40 percent of Bachelor’s degree recipients say they wish they had chosen a different major and 25 percent say they wish they had studied at a different institution.

These regrets don’t stem from a perceived lack of education quality. Gallup found that 89 percent of Bachelor’s degree holders agree they received a high-quality education. The real turn-off is more likely employability—or lack thereof. According to a 2017 report by Burning Glass and the Strada Institute, 43 percent of college grads work jobs that don’t require a degree for their first position out of school. Even after that, the study found that 23 percent of grads continue to be underemployed after five years, and roughly 20 percent remained underemployed for 10 years or more.

But even as students are frustrated that their degrees aren’t translating to jobs, employers are frustrated that they can’t find qualified employees. According to a survey released by the Association of American Colleges and Universities, 58 percent of employers say improvement is needed to prepare students for entry-level positions and 60 percent of employers said improvement is needed to prepare students for career advancement.

“Obviously it’s different for doctors and other scientists as well as some other professions,” said Eric Duffy, CEO of Pathgather and an advocate for on-the-job learning. He continues:

But for most people, the traditional college experience doesn’t give you experience with workplace skills. It’s strange how universities spend so much money on manicured grounds, beautiful dorms, and lots of mail sent out to attract applicants. It all seems so divorced from what should be the objective, which is to prepare people to excel in the real world.

More partnerships between businesses and institutions of higher education would help to address these challenges. By working with educators to shape classes and degree programs to teach the skills they value, employers could build the workforce they need, often from within their existing labor force. Meanwhile, students could invest in education programs designed by employers with greater confidence, knowing that these programs would equip them with employable skills.

Some employers have already begun testing these business-education partnerships. Google, for example, partnered with online learning platforms Udacity and Coursera to provide nanodegrees and specializations that prepare workers to meet company needs.

But Walmart’s new Live Better U program takes business-education partnership a step further. Rather than providing one-off classes or specializations, the program partners with colleges and universities to provide entire degree programs that reflect the skills Walmart seeks in employees. Better yet, Walmart bears the brunt of the cost, charging employees only $1 per day to earn a degree in one of 14 different areas of study including management, business, computer science, computer and network security, or computing technology. Although costly for the company at the outset, Walmart’s investment in its people cultivates a skilled and grateful workforce likely to stick around and strengthen the company for years to come.

Dustin Clemons for example, graduated from high school but never went on to college. Although he always wanted to pursue a degree, it was all but impossible while caring for his 3-year-old son and working. Now, with Live Better U, Dustin shared that he is able to take online classes with plans of eventually earning his bachelor’s degree. His goal is to be promoted to an assistant manager at Walmart.

So far, 4,500 Walmart associates have enrolled in the program, and the program’s developers hope they will use this opportunity to grow and apply what they’ve learned within the company.

“They wanted access to higher education to improve their lives,” Drew Holler, senior vice president of associate experience at Walmart told USA Today. “What we know also is that it’s going to help us with retention . . . and it’s providing skills we need in the future.”

While the program has yet to see whether its first batch of participants successfully graduate, obtain next-level jobs, and continue at Walmart, the program’s design offers an approach other employers should consider, one that both increases access to education and gives employers confidence that graduates have the skills they need to help their company succeed.

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Decline of the M.B.A., Fall of the Humanities: What’s Left?

A thoughtful young professorial colleague of mine bitterly denounced business schools in a conversation with me last week, suggesting that they promote a vocational orientation to college that is excessive and unhealthy. Colleges, when they evolved in colonial America, were designed to promote virtue, religion and morality, and later that evolved to include a sense of civic consciousness—an obligation to serve one’s fellow citizens admirably. Others have looked at colleges as a device designed to realize the American Dream, promoting inter-generational income mobility. Among some today, these non-vocational purposes of higher education still resonate. Nonetheless, new college students routinely state that the primary purpose of college is getting a job, so not surprisingly one of the modern trends is the rise in the importance of majors in business-related areas at the expense of majors in the humanities and some social sciences.

Yet the Cadillac or BMW of collegiate business education has long been the M.B.A. degree, and for years wannabe business tycoons have eagerly sought the M.B.A. credential and the six-digit salaries associated with that degree, often obtained after working several years after the bachelor’s degree. In recent years, however, the traditional two-year M.B.A. has become a slightly tarnished degree, with some major programs such as the Gies College of Business at the University of Illinois announcing the end of their residential M.B.A. program. Even the most prestigious national programs such as Harvard’s, Penn’s Wharton School, etc., have seen a decline in applications. Meanwhile, of course, the number of students getting degrees in such traditional liberal arts fields as history, philosophy, English literature, etc., is also stagnant or declining, with those earning Ph.D.s often ending up in wildly unrelated vocations (e.g., tree removal) upon completion of schooling.

Several factors are at work here. With respect to business education, many students are doing online M.B.A.s to save some money and maintain the ability to work at least part-time while studying, and others are getting new degrees in subjects like data analytics or financial economics that provide training for responsible business positions but are less a generalist degree than the M.B.A. However, a number of majors that are neither business nor arts and sciences have boomed in modern times, such as in communications, healthcare-related fields, or even parks and recreation.

My colleague’s lament is relevant, however. Increasingly, kids look at colleges as sort of a sophisticated form of vocational education that once was a staple of many high schools. You go to college to get training preparing you to do some marketable skill. Even 50 or 60 years ago, studies in the sciences and engineering were considered appropriate college subjects and that training prepared persons for jobs. And many persons seem to accept the appropriateness of significant colleges training students in a few technical subjects such as accountancy or actuarial science. In the fine arts, degrees in music or theater have long led, with considerably less success, to fulfilling vocational aspirations. And a sizable number of students have historically attended education schools to prepare them to teach. But a large portion of students majored in subjects they knew would not directly prepare them for jobs—history, philosophy, English literature, sociology, political science, and so forth: the liberal arts.

Data I have observed on post-graduate earnings suggest two things. First, an awful lot of human capital is formed on the job—mid-career workers earn dramatically more than new college graduates in large part from the knowledge specific to their occupation gained from many years of working. Learning by doing is substantial and important. Second, while there are dramatic differences for new graduates in earnings by major, many persons studying subjects such as philosophy that are largely devoid of any direct vocational relevance do pretty well financially in the long run, because they gain needed critical reasoning, writing and other skills associated with a college education. As I recount in my new book Restoring the Promise, mid-career earnings of philosophers are over double early career earnings, and those mid-career philosophy majors average higher earnings than those whose major was “general business.” While it is true that “college majors matter,” it is distinctly not true that “college majors alone matter” in determining vocational success.

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