Editor’s note: This column ran in the Jan. 18 edition of The Pulse, a weekly BankBeat email sent to subscribers which also includes top stories from the previous week.
Like a lot of Americans, I started making monthly payments on my student loans again last fall. Between grad school and the pandemic, the last time I made a payment was 2017. They’ve been a manageable expense for me, although I know more than a few people who will struggle. Collectively, student loan borrowers owe more than $1.7 trillion. So far, however, fears that the payments resuming would be a drag on the economy as a whole appear to be unfulfilled.
In that environment, I’ve been thinking a lot about the value of a college education. When I started college, it was seen as a matter of course that a degree, particularly a four-year one, would open a lot of doors and was worth the investment. Given the increased costs of a college education, is that still true across the board? Even two years at your local state school could put you back more than $10,000 a year. No doubt there are many careers where it is necessary, but should it be the default for all white-collar work? What do students learn in college classrooms that they couldn’t pick up on the job — and is it worth the price tag?
As much as I value my experience and what I learned during my undergrad degree, it didn’t actually have much real world application for the job I’ve ended up in. We’ve written before in our print magazine about bankers and educators combining to create degree programs specifically tailored for the needs of community banking, but those programs are comparatively rare.
I’ve talked to more than one community banking executive who didn’t have a college degree when they were hired. Some of them went on to get a degree; others stuck to certificate programs or one of the graduate schools of banking. All of them were highly qualified and skilled, evidenced by the fact their institutions had seen fit to promote them into their C-suite roles.
But if a degree — even from a state school — no longer makes financial sense, the white-collar job market will have to get realistic about using it as a prerequisite for hiring. The state of Minnesota recently stopped requiring college degrees for many of its jobs, joining a growing trend.
If it makes sense to keep the requirement, by all means do so. But I encourage hiring decision-makers to take a hard look at whether that degree is really necessary for positions on the entry-level side.
Another option for some would be to skip the white-collar career path entirely. Dennis Frandsen, owner of Frandsen Bank & Trust here in Minnesota, has made it a big part of his philanthropy over the years to fund scholarships to trade schools and technical colleges. I’ve always admired his emphasis on alternate pathways to a career. And, as a renter, I definitely noticed when a friend’s younger brother (a plumber) could afford to buy a house in the suburbs years before I’ll hit that mark.