Is College Worth It?

New research from the Federal Reserve Bank of St. Louis indicates that the so called “college wealth gap” has evaporated and even turned in the opposite direction. The long standing premise and perception was that those with a college degree not only earned more but also became more wealthy than those without a degree.

It may still hold for now at least that degree holders earn more, but data shows that they are not becoming more wealthy. The primary reasons behind this shift are the enormous levels of debt college graduates accumulate in order to make it through college, and how that debt prevents them from purchasing homes earlier in their lives and careers. The proliferation of student loans and nature of how banks create new money has generated home ownership FOMO many graduates are unable to overcome given their cash flow. Consequently, as a whole many have missed out on immense gains in real estate values which are still the top driver of wealth especially in the middle class. Just check out how much it costs to rent in San Francisco or live in Boston, and it is very easy to see how paying back student loans and rent can block someone from buying a home.

Workforce conditions and the concept of jobs and work will continue to evolve as we see more and more robots in retail, self driving trucks and delivery, and the emergence of new technologies like Bitcoin. Perhaps folks can leverage their own data and make money from it at some point.

Colleges and universities are not blind to this shift. They have already rolled out programs where students sell stakes in themselves and give up future earnings rather than taking on loans.