Research shows that a college degree pays off in the long run
Going to college is expensive in 2019, even if you are on a grant. But all the evidence suggests it will be worthwhile from a lifetime earnings' point of view, despite the darkening clouds on the horizon of our booming economy.
A forthcoming report from the Higher Education Authority will show Irish graduates did well in the jobs' stakes with their unemployment rates in low single figures last year. A separate study will confirm high levels of satisfaction among employers who took on graduates or those with further education qualifications.
We know from published data that the 'premium' attached to a degree in this country is significant. Recent information from the Central Statistics Office shows that Irish graduates earn two-thirds more than non graduates. This differential is slightly higher than the average 60pc for those with degrees in the EU as a whole. Of course, there are differences in earnings, depending on what the graduate has studied. Arts graduates, for instance, tend to have lower starting salaries but many can quickly catch up with training, experience and postgraduate qualifications.
In general, graduates in many EU countries still think it worthwhile studying for a degree. This is different from the situation in the US where the law of diminishing returns has set in for 'investing' in a college qualification, particularly in a top tier university. Tuition fees in the States have risen rapidly and are usually multiples of the €3,000 that half our students have to pay (the other half are on grants).
American students borrow heavily to make their way through college. But many are then saddled with debts to the end of their life and find that their earnings are not enough to pay off loans and live with reasonable comfort. Many is the primary school teacher in a disadvantaged city centre school in the US who has fulfilled their professional dream but at a very heavy price. At present there are more than 44 million borrowers who collectively owe $1.5 trillion.
Fees are also very steep in the UK where the value of outstanding loans last year was £108bn (€124bn); this is expected to reach £450bn (€517bn) by the middle of the century. Tuition fees of £9,250 a year (€10,629) are not exactly designed to attract mass enrolment, particularly from risk-adverse families in the UK.
In Ireland, however, higher education is still a good 'bet' with the returns more than matching the initial investment. But will this last? Will all the hard slog in college be worth it all as we head into a post-Brexit world marked by tariffs and trade wars? These are among the questions troubling current and future students.
It's instructive and reassuring to look at the evidence for what happened during the most recent economic upheaval. The fact is that while unemployment was rocketing as the economy went into reverse, graduate employment continued to rise, albeit with heavier than usual emigration. That pattern was not unique to Ireland, which has a very high percentage of young people going in college. In the EU as a whole the employment of graduates has risen by an average of 3pc annually since 1995.
Although we often hear complaints about the quality of our graduates and their supposed lack of preparation for the real world of work, employers seem to be happy with them. That's the clear message from a number of separate studies. The UCD Smurfit Business School is the only Irish one ranked by the Financial Times as being in the top 100 in the world. Meanwhile Trinity's graduates are among the most employable in the world according to the QS World University Rankings, which has just been published.
Yet to be published is a study by Fitzpatrick Associates which draws on interviews with 760 employers in Ireland. Employers that have hired either higher education or further education graduates in the previous 24 months are, in general, very satisfied with graduates across a range of workplace and personal attributes. The satisfaction rates were 86pc for higher education graduates and 84pc for further education.
At least four out of five were satisfied in terms of graduates' application of technical knowledge; computer and technical literacy; verbal and written communication skills; numeracy, processing and data interpretation skills; ability to work effectively, both on their own or with others; and attention to detail. Whatever the naysayers have to say about standards in higher education, four out of five employers said they were also satisfied with graduates in terms of professionalism and work ethic; reliability; positive attitude; ethical and social awareness; and ability to cope with work pressure.
There were inevitably some concerns. Three out of four were satisfied with graduates' levels of commercial awareness, entrepreneurial skills and foreign language capability which means that one in four was not. More worrying is the finding that satisfaction among foreign-owned firms with the foreign language capability of graduates is noticeably lower than average. The satisfaction rates among these firms were only at 55pc for those employing higher education graduates and 44pc for those employing those with further education qualifications.
A note of caution as well for those expecting to waltz into a well paid job the day after graduation. One in 20 employers said salary expectations were the reason they didn't hire graduates. It was an issue especially for smaller Irish-owned firms and for construction companies in particular. It was less of an issue for foreign-owned companies who did, however, report some difficulties in recruiting suitable graduates, particularly in niche areas.