More and more Generation Zers are considering not going to college at all, particularly in the wake of the COVID-19 pandemic, where the situation disrupted traditional classes and forced the mode of learning to become online. Most Gen Zers today find ways to work at companies that accept skilled applicants (if they’re lucky), or some of them start their own businesses.
Mostly, though, rising tuition costs have pushed some young adults to drop out of college altogether. In the United States, about four million fewer teenagers enrolled in college in 2022 than in 2012. Indeed, from 2010 to 2022, university tuition has increased to an average of 12 per cent a year, while overall inflation rose an average of 2.6 per cent each year.
In the US, the average cost for four years of education at a public university is at least US$104,108, while attending a private university can save you around US$223,360. In Australia, the expense of a university education ranges from AU$20,000 to AU$45,000 per semester.
Despite investing in a college degree, the anticipated post-graduation incomes have failed to match the rising cost of education. A 2019 Pew Research Centre study highlighted that young college-educated workers' earnings have largely stagnated over the past five decades.
In the US, four years after graduation, a significant portion of students find themselves earning less than US$40,000 USD annually. According to data from the Higher Education Authority, this figure is lower than the average salary of US$$44,356 for individuals with only a high school diploma. On the other hand, in Australia, the average annual salary stands at AU$75,000, as reported by Talent.com.
Is it okay to skip college and work instead?
In a 2019 study conducted by Cengage, it was found that 34% of employers believe that college education does not adequately equip students for the demands of the job market. Moreover, the study revealed that the most sought-after skills are ones that individuals can acquire with or without a formal degree.
Those who skip college can find more ways to learn and improve their skills through self-directed learning. They can always invest in what is called “career capital.”
“Career capital are the skills you have that are both rare and valuable, and that can be used as leverage in defining your career,” says Cal Newport, assistant professor at Georgetown.
Career capital is an in-demand skill that employers need in the workplace. It can be anything from graphic design, computer programming, public speaking, and car repair to writing. The possibilities are endless.
Some alternatives to going to college include doing an apprenticeship, enrolling in a coding boot camp, taking online courses, starting a business, becoming a realtor, getting a job, monetising your hobby, building a digital footprint, learning a trade, getting into marketing, writing a book, earning money while playing video games, or making a career in fitness.
Why some prefer a college degree despite the costs
Entrepreneurship offers a promising path to financial independence; however, establishing a thriving business demands considerable time, unwavering dedication, and resilience. While a college degree is not a prerequisite for launching a business, it undeniably provides valuable advantages. College imparts knowledge relevant to entrepreneurship and nurtures essential soft skills, such as fostering a lifelong learning mindset, which can significantly benefit aspiring entrepreneurs.
Is a degree essential for launching a business? Technically, no, but that doesn't imply you should overlook its value. Particularly in industries characterised by technical complexity, a college degree can prove highly beneficial and, in some cases, even indispensable to your success. If you possess limited knowledge of business fundamentals or anticipate handling intricate documents and processes, enrolling in college courses may serve your best interests.
Lauren Grech, CEO and co-founder of the international event management firm LLG Events, contends that obtaining a degree or at the very least pursuing higher education, can provide substantial advantages when initiating your entrepreneurial journey. She underscores how the college experience cultivates ownership, accountability, time management, prioritisation, and emotional maturity skills.
“It may not be essential within certain career choices; however, it really helped me personally,” says Grech. “My education helped me develop a proper business model, enabled me to understand certain law documents or tax laws by giving me the ability to think critically and analytically, and provided the tools necessary to read through these documents thoroughly.”
While it's possible to establish a foothold in your industry without a college degree, you'll probably require ongoing education to thrive as an entrepreneur, even if this education takes an informal route.