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The Forum > General Discussion > What is the dollar value of a university degree?

What is the dollar value of a university degree?

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Perhaps not as much as you think. See:

http://www.businessweek.com/bschools/content/jun2010/bs20100618_385280.htm

You might just be better off putting the cost of the degree in the stock market and going straight from school to work.

One thing the article does not cover. People like me who have taught at universities sometimes find this hard to believe but it seems to be true.

ON AVERAGE people who attend universities are smarter that people who don't.

I've capitalised "on average". It is an average with many exceptions. There are many bright people who never go anywhere near a university and there are many graduates who appear to have no functioning brain cells. But we are dealing here with averages and, on average, it's true.

So was it the university degree that enabled them to earn more than those who never attended a university? Or was it their native smarts?

I suspect that for most of my students their degree was a waste of time and money. Whatever they achieved they were going to achieve, or not achieve, anyway. The exceptions were those who obtained professional qualifications such as a medical or engineering degree.

I find it interesting that in terms of value for money the best performing school in America is MIT, not Harvard. It says something about America that a university specialising in science and mathematics tops the list.
Posted by stevenlmeyer, Thursday, 1 July 2010 9:38:08 AM
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Steven.. a peer of mine..same iq tests.. same training.. (until later) at tertiery level, then after a few years in the RAAF he did a degree.."data communications"....now after working as a project manager for Telstra for some years ($900/day) he now works for another large utility at over $200k/annum... (after being 'unemployed' for 6 months or more after telstra.)

the degree is what did it.
Posted by ALGOREisRICH, Thursday, 1 July 2010 12:56:25 PM
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Steven,

Before entering academia, I worked in the Head Office of a bank in the areas of strategic management, marketing and information systems. The bank, especially in IS, saw a degree as a means for selecting people, who were able to "stay with" difficult tasks. The degree itself was a side bar. My sister-in-law said the same thing about short-hand in days of old regarding secretaries. Short-hand wasn't needed by employers, yet someone who would learn short-hand was.

One the other hand, in Government, I find it interesting that SES positions seem to require less formal education than for middle management positions. As if the vacancies are there for the politically adept.

I have three post-grad degrees and reached financial diminishing returns on effort a long time ago.
Posted by Oliver, Thursday, 1 July 2010 1:11:39 PM
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I can honestly say my university degree has had zero effect on my working life. I could very easily be in exactly the same or better position had I never attended university.

This could have more to do with my general laziness, apathy, spirit of working to live, hatred of suits and the word career, than it does with university perse.

But, I think university is now neither here nor there. It is no longer a house of learning and original thought, and the older posters can educate me on whether it ever really was, but it was a bitter disappointment to me. I was very apt at 'passing the test', without really learning anything. That I was able to do so little work and pass made me realise that the status given to a university education was a complete fraud.

Maybe I just don't respect any institution that accepts me as a member. University should only be for the really really smart. TAFE should be there for the rest.

Neither is it a useful training ground as evidenced by some of the graduate employees I have encountered. It definitely isn't worth the HECs debt, and I would advise any kids that were good with their hands or showed any entrepreneurial flair to skip it altogether.

In short, reduce the numbers at uni to the top 5% of the country, send the rest to TAFE where they belong, get rid of the soft subjects, make it hard to pass, and we would have a more useful and productive country.
Posted by Houellebecq, Thursday, 1 July 2010 1:54:12 PM
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There's SO MANY opportunities I've missed because I was more interested in drugs and alcohol as 'a kid' versus getting a degree and having that piece of paper.

It seems to me, that in order to get high end income - high end for me is around 70K+ - you either need to BUST YOUR HUMP without a degree, or bust your hump with one, but get appropriately remunerated.

I'm lining myself up to study now.
Posted by StG, Thursday, 1 July 2010 2:43:37 PM
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Houellebecq,

Sorry, re: your comment uni should be for the REALLY smart. My brother wasn't an over achiever at school but he is a HARD worker and started out dressing the dead at an old folks home. He worked HARD for his right to be an ambulance officer and is now a senior paramedic years later who lectures doctors on emergency treatment and has just done presentation to senoir docs on new drugs that we'd benefit from in emergencies only available in the states...etc etc.

Not trying to blow HIS trumpet - although I am MASSIVELY proud - but he's a CLASSIC example of HARD WORK paying off. He didn't get past year ten at school and did it all after. But without working and uni study at the same time he couldn't have achieved any of it.
Posted by StG, Thursday, 1 July 2010 2:51:41 PM
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AGIR

Two points:

--We are dealing with averages. In a particular case some people may put the skills and knowledge they acquired doing a degree to good use. I am not saying that acquiring a degree is ALWAYS a waste of time and money.

--Maybe your friend has some other qualities that you lack which enabled him to get ahead. Perhaps he would have done so even had he not had a degree.

Oliver

You raise an interesting point. Very often the possession of a degree is used as evidence that you have the self-discipline to stick with something.

There is of course another factor. Most human resources flacks have degrees. Since they write the rules they tend to make possession of a degree a pre-requisite for many jobs.

One point we should all consider. It takes 3-4 years to earn an under-graduate degree in Australia. Suppose you had been working those 3-4 years:

--You would have earned a considerable sum

--In most cases you would have learned more and acquired more skills than a university course can provide

--Most business jobs do not require a degree.

I want to emphasise that I am talking about "naked" undergraduate degrees only. If you want to become an accountant, engineer, doctor, lawyer, psychologist etc you need the credentials.

StG

I do not know what it is you intend to do with your life. Nor do I want to discourage you from getting a qualification. But I will ask you to consider the following:

--To get a worthwhile degree from a good university requires considerable effort over a number of years.

--Would you be better off devoting that SAME EFFORT directly to your career / job
Posted by stevenlmeyer, Thursday, 1 July 2010 3:02:40 PM
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My degree got me my first big job, but very little of it was of much use, in that job.

I learnt most of my engineering from tradesmen, who I found love teaching anyone who really wants to know. The good ones never stop learning, or teaching.

However, the high tech engineering was taught to me by a couple of amateur engineers, one a sales tax expert, & the other an insurance broker. None of the professionals I have met, although I'm sure there are many, ever put as much effort into perfecting something as those amateurs.
Posted by Hasbeen, Thursday, 1 July 2010 4:37:48 PM
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I want to do youth work, stevenlmeyer. I've always wanted to do a community work sort of thing. I can start out on cert 4, but at some stage I'll need a degree. It's an entire change of direction for me.
Posted by StG, Thursday, 1 July 2010 7:24:40 PM
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StG

I wish you luck in your chosen new career. If you need a qualification to make progress in it then of course you must go for it.
Posted by stevenlmeyer, Thursday, 1 July 2010 8:39:32 PM
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Dear Steven,

I'm not sure of the statistics but the
proportion of the population with bachelor's
and master's degrees, and even doctorates seems
to have increased at an astonishing pace.

Education appears to have expanded in response
to economic growth and new and challenging
jobs have demanded higher levels of skill.
Universities have helped to keep
the social system in balance by producing the
necessary trained workers.

However, having said that -
Numerous studies have shown that there is
little or no relationship between educational
achievement and job performance or productivity.
For example, good grades in a graduate school of
medicine or education are poor predictors of whether
someone will become a good doctor or teacher.

The fact is that the skills required to get a Credit or
a High Disctinction
in a university course on anatomy or educational
philosophy are not the same skills needed to deal
with a medical emergency or an unruly high school class.

Most people pick up the necessary skills on the job, not
in the classroom, and the characteristics that make for
a successful career (initiative, leadership, drive,
negotiating ability, willingness to take risks, and
persuasiveness) are not taught in universities.
Also, many univsity graduates actually work in fields
they consider unrelated to their major subjects.

What is the dollar value of a university
degree? I would say - that depends on the area of study.
As a Librarian, formal qualifications are mandatory
for my job. You can't be an Associate of ALIA (Australian
Library and Information Association) without
tertiary qualifications, and that is a pre-requsite in
being hired as a Librarian.
On the whole, however, a higher credential means higher
earnings, simply because of the value the job market
places on it. If you look at top earning
professions like Physician, College Professor, Psychiatrist,
Judge, Lawyer, Dentist, Banker, Psychologist, Architect,
Vet. et cetera -
you will notice that these jobs tend to be those
that are known not only to yield the highest incomes
but also require the longest education.
Posted by Foxy, Thursday, 1 July 2010 8:57:00 PM
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My degrees provided me with the skills and training that are a **NECESSITY** in my field of work. I'm now retired, but without my degrees I would not have been able to perform my work at a safe and competent standard. A degree is invaluable. Almost any degree is invaluable. If a person considers it's not, then the fault lies with the person NOT the degree.......... but that's life, the world is full of people who blame everything and everyone for their lack of progress.

A degree "itself" doesn't mean anything...... a piece of paper is just that, "a piece of paper" and is meaningless by "itself". That's why many people with degrees are failures. The failure is NOT the education they received; it's the person that's the failure, because he/she is incapable of "using" their education to full effect: But even under those circumstances a person can still become very successful in fields that provide "on the job" based training.

So in other words, even if a university training fails to inspire and motivate a student, there's still heaps of opportunity in our type of society to become successful in one's working life.
Posted by benq, Friday, 2 July 2010 2:37:43 AM
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'My degrees provided me with the skills and training that are a **NECESSITY** in my field of work'

Engineering perhaps?

'the world is full of people who blame everything and everyone for their lack of progress.'
Well, I'm personally happy with my 'progress', but I can honestly say that I could have achieved the same thing without the 3 years of very costly 'training' at university.

'Almost any degree is invaluable.'
Hmmm. Stretching it there. I don't think you appreciate the debt that university students are saddled with and the opportunity cost of those 4 years not working. Added to the fact many end up working in a field totally unrelated to their degree as they chose their course at the young age of 17 or 18. Which would be fine if universities were more than sausage factories training kids for specific occupations and actually gave a broad based education and promoted original thought and learning.

'That's why many people with degrees are failures. '
Really? What is your criteria for success and how much do you think it matters to those you label failures?

I would be with you if university was a house of learning and independent thought for those with very high intellect. These days you need a degree to work in HR.
Posted by Houellebecq, Friday, 2 July 2010 8:28:46 AM
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Foxy,

Income is related to need, access and demand. In medicine in particular, we find vertical demand curves, wherein, the buyer will usually pay what ever it takes. If you need by-pass surgery, you must pay for on the seller's terms.

We have all expienced the five minute consultation at an HMO (Medical Centre), wherein we a paying often times for access and what the GP knows, rather than what the GP does. Compare this to a university lecturer with higher quilfications than a GP, wherein, the academic is paid for what he/she does, not usually what they know: e.g., marking.
Posted by Oliver, Friday, 2 July 2010 12:30:16 PM
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Houellebecq, you seem to have missed the bit where I stated that people can become successful via "on the job" learning. In fact that's exactly where the vast majority of people gain their most applicable skills.

You ask, "what is your criteria for success?". Well Houelly, "my" criteria to anyone else is utterly irrelevant, as is your's. Each individual's criteria is important to "themselves", NOT others. Surely you could not be implying that there are no failures with university degrees? Therefore, what I said was that there are failures with university degress, just as there are failures without university degrees. The final definition of "failure", as I said, rests with the individual. Not EVERYONE with a degree considers themselves successful. Not everyone with a degree considers themselves failures.

I hope it clearer now for you. The written page can be VERY bad for "communication", as dotting every i and crossing every t can result in posts that go on for pages and pages and pages.

Engineering? No.
Posted by benq, Friday, 2 July 2010 1:43:35 PM
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StG: Congratulations to your brother and I hope you go forward with your plans.

Formal study is a wonderful thing to do at any age.

Depending on the industry, new graduates nowdays earn anywhere from about $38,000 to $55,000. However, you don't have to have completed your course to increase your job prospects. Just having the course in progress tells prospective employers that you're disciplined and goal directed and open to new ideas.

Sure you can survive without a formal qualification, but why not grab every advantage that you can and enjoy some seniority and authority at work?

Apart from all the job biz; study (TAFE or Uni) can just be a wonderful past time. It also sets a good example for younger ones in the family.

Don't worry about HECS debt; you have to earn over a certain amount to pay any and it's deducted from your wage at a set rate (like 4% of income or something) before you're paid. Each subject might cost about $500. If your earnings never reach some minimim amount then you can take the debt to your grave; you won't notice it anyway because you'll be paying it as you earn.

Again, very best of luck with it!
Posted by Pynchme, Saturday, 3 July 2010 1:27:51 AM
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I find the comments here very interesting.

First a point.

Obviously, as Foxy and Oliver have pointed out, certain professions such as accountancy, engineering, law and medicine, command high pay. Obtaining the qualifications that enable you to practise in any of these fields almost guarantees an above-average income.

However most university entrants either fail to complete their course or emerge with a bachelor's degree that does not qualify them to practise any of the high paying professions.

So let me restate the question:

WHAT IS THE DOLLAR VALUE OF A BACHELOR'S DEGREE THAT DOES NOT LEAD TO ANY PROFESSIONAL QUALIFICATION OR FURTHER STUDY?

Note, UNIVERSITY DEGREE, not tertiary qualification. The economics associated with TAFE qualifications or IT qualification are entirely different.

What for example is the dollar value of, say, a B.Com degree from Deakin or University of Western Sydney assuming no further study?
Posted by stevenlmeyer, Saturday, 3 July 2010 8:46:48 AM
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stevenlmeyer hi.

That's an odd request. I always thought that B. Comm were pretty valuable degrees that make one eligible for professional membership in whatever specialty is studied in the course - like accounting for example. So any graduate could find employment in almost any field - management (of any organization from retailers to health services, NGOs and the like); government department - policy or admin or management, and other areas. As a member of a public, I'd prefer to pay someone with a degree and professional membership to do my taxes or to give me financial or investment advice, so I think it gives someone wanting to set up their own business some credibility.

Let's consider something like a basic Bachelor of Arts. That might include studies in journalism, history, English, maybe a language, economics, sociology or perhaps psychology. Apart from it being a path towards teaching high school and adults; in its own right it develops advanced research and composition skills. So someone could end up working in human service organizations like neighbour hood centres and NGOs, as a research or policy officer or archivist in a range of fields and local or state goverment - diplomacy, stats, local and state history; journalism; publishing; even as a tour guide! It all depends what subjects and major areas of study the degrees contain.
Some of these studies are the beginning, not an end.
Posted by Pynchme, Saturday, 3 July 2010 12:13:25 PM
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Hi Pynchme,

There are certain professional associations such as the accountants that require an undergraduate degree as a pre-requisite to being admitted as a student. However most of those associations still require you to write their own exams.

For example, my son graduated with a B.Com degree majoring in accountancy. However that did not make him an accountant. He still had to complete the CA course which, he said, was much tougher than his university course.

Most B.Com graduates do NOT go on to do any sort of professional qualification. I am VERY sceptical of the value of a B.Com degree without a subsequent professional qualification.

In my experience one of the more valuable undergraduate degrees is actually an arts degree with an English major from a GOOD university. The ability to write lucid prose gives you a definite competitive edge.

To what extent does the value of a degree depend on the university?

On the face of it, an undergraduate degree from University of Melbourne has a higher cash value than the equivalent degree from, say, Victoria University.

However the entry requirements for Melbourne are much tougher. In other words, ON AVERAGE, Melbourne gets the smarter students. So how much of the better average earnings of Melbourne graduates is due to their innate smarts and how much to the superior instruction they allegedly received at Melbourne?

Bear in mind that a very high proportion of students fail to complete their course. We do need better admission criteria.
Posted by stevenlmeyer, Saturday, 3 July 2010 1:04:48 PM
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After completing uni in 2008, this week I got my very first HELP statement. $23 000 for a science degree is the short answer, and it goes up with the CPI each year, last year was 1.9% being $419. I did have a job out at the mines until the CSA caught on, although there is no mention of the HELP deductions during that time (8% of my gross wages).

I have to accept it has been financially a disaster going to uni for me, and the fact is employers are not interested in mature-aged graduates who really need a decent wage to make ends meet. Its understandable, you can get a smart kid that still lives at home with a degree and pay them peanuts, as long as you promise a bright future.

Personally, its an experience that has rewards other than heaps of money. Often it seems those most critical of uni either havent ever been there to study, or did the first year or so then dropped out.
Posted by PatTheBogan, Saturday, 3 July 2010 4:01:04 PM
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PTB wrote, "I did have a job out at the mines till the CSA caught on".

Are you referring to the Child Support Agency?
Posted by benq, Saturday, 3 July 2010 6:31:32 PM
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Yes, the C.S.A. is the Child Support Agency. This thread isnt about the CSA, but they are also a branch of the Australian tax office. Effectively, one government department (HELP, used to be called HECS) is asking for heaps of money, and another government department telling me if I ever work I wont get paid for it. I'm just glad I was able to give my (partly reasonable) ex a swag of money to look after my kids, before the child support agency ended that job.

It could be described as an academic concept, the dollar value of a uni degree. Yes, I have a huge bill. No, its not looking good they will ever recover it. Are separated fathers the main defaulters of HELP debts? No. That would be young ladies who have babies and become housewives instead of completing their degrees. But since they have minority status, it wont get much airtime.
Posted by PatTheBogan, Saturday, 3 July 2010 6:53:19 PM
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The value of a degree is really up to the applicant and depends on
their plans.

It makes sense to take some notice of where the jobs are, when
people decide to study. Yet another arts degree can be rather
meaningless, yet we know that Australia is short of engineers,
doctors, vets, accountants,geologists, nurses and a whole host of other
qualifications, as far too many decide on pot luck about their
future. Perhaps we have just had it too good for too long,
to appreciate what we have.

The great thing is that Australia gives anyone the potential to
do a degree, if they so wish, which should not be taken for granted.
In many places, it is only the rich, who can pay upfront, who
have this opportunity.

So rather then complain about HECS, count yourself fortunate.
Posted by Yabby, Saturday, 3 July 2010 9:02:50 PM
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You are correct in my opinion Yabby and I wish to add that there are numerous positions for Grads in many capital cities if they choose to earn wages while studying. Also, recruitment agencies snap up university students to fill in short term admin roles during uni holiday periods.

For people able to study in Australia the opportunities are boundless while paying for HECS undertaking relief admin casual work, thereafter obtaining referees for other work to assist HECS fees.
Posted by we are unique, Sunday, 4 July 2010 11:17:56 PM
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Thanks Pat The Bogan for that reply. Damn it, you got "caught out" (your phrase) by the CSA. Hmm, a lot of non custodial mothers and fathers get "caught out" for not paying child support. They all seem to think a "private" arrangement is just peachy instead, but guess what? That "private" arrangement is almost ALWAYS a sneaky way to pay LESS. Come on bud, be a real man, and own up to your legal responsibilities to support your offspring according to the LAW.

You KNOW you don't have to repay that HECS debt of $23,000 at once. If you earn below a certain level you don't even have to pay one cent of it for your entire life. So stop the moan and groan about HECS and your legal debts to your own offspring. Be a man, get a job, pay your debts and support your kids without the "woe is me" moan and groan. The world doesn't owe you a living.

You're in your current situation because of **CHOICES** made by **YOU**: YOU acquired the HECS debt, YOU fathered children, YOU got "caught out" by the CSA avoiding your legal responsibilities. Only **YOU** can rectify things. Stop blaming others.

You have a tremendously valuable degree. It's up to you to make good or bad **CHOICES** regarding that degree. It's up to you, NOT others. You're responsible for your own life.
Posted by benq, Sunday, 4 July 2010 11:51:17 PM
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we are unique: Hiya.

Yes!

There are also scholarships open to all students. Most universities have a list of dozens; even hundreds, for which students can apply. Some other organizations also fund scholarships; traineeships or help with Hecs/Help debt - for people doing some degrees (like in health) and the like. Some included are listed by Sarrah (not sure of the spelling); government departments (check the department - health is one) and the military forces (even part-time service).

Also, if one is earning, a lot of study costs are tax deductible.

There are opportunities to get ahead but one has to surf, snoop and ask around.
Posted by Pynchme, Sunday, 4 July 2010 11:59:16 PM
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