The College Premium Isn’t What Georgetown Says It Is

One of the downsides of writing is the risk of a PR firm getting hold of your email address. Over the years, my email has found its way into the clutches of predatory PR firms. The result is an inbox inundated with dumb press releases. At the risk of doing the same to yours, lowlights include:

An increasingly common inbox theme is surveys from higher-ed-adjacent companies on how unhappy students are about the whole thing. These press releases report results that are invariably unscientific, but lend themselves to headlines like “1 in 4 Gen Z Regret Investing in Education.” Who are these companies asking if I’d be interested in interviewing their “researchers”? Why the axe to grind? This latest is from EduBirdie, a self-proclaimed “professional essay-writing service” that’s already on the bad side of many colleges and universities. Hey EduBirdie, here’s another unscientific survey: 4 in 4 recipients of your press release regret receiving it.

I used to pay attention to the ping-pong of “college is worthless” vs. “college is valuable” emails, but they’re now diverted to the same folder as Stress Free Car Rental and Soft Kids. It’s not only emails; recent books by Paul Tough (The Inequality Machine: How College Divides Us) and Ben Wildavsky ( The Career Arts) compete for attention and sales. Still, I think we can stipulate that all other things being equal, more postsecondary education is better than less education. Among other things, that means a degree is better than no degree. Sadly, other things are not equal. Affordability – not just tuition, but also fees, room, and board – is sucking all the air out of the quad, leading to looping, backward-looking debates about loan forgiveness. As Tough notes, “the average total cost of attending a private college, including living expenses, is about $58,000 a year.” And this has helped drive public perception of college to an all-time low, at least according to unscientific surveys.

But affordability wouldn’t dominate discussion if every student graduated into a good job. At this point, we can probably also agree that every student is not and that choice of major matters a great deal: computer science and engineering degrees from any institution are likely to pay off while a wide range of not-a-job humanities and social sciences programs (including pseudo-pre-professional majors like business – few employers are super-jazzed about hiring “business” majors) are not.

To fend off critics over higher education’s last decennium horribilis, the college-industrial-complex has relied on the work of Georgetown’s Center on Education and Workforce (CEW). In 2011’s The College Payoff – a report that should be gilt-framed on the office wall of every college president – CEW declared the “college premium” was nearly $1M because census data show that high school graduates earn $1.3M over a lifetime whereas college graduates earn $2.3M. CEW’s calculation was based on 2009 census income data for ages 25-64, which means career launch had already occurred prior to the Great Recession. That may explain why CEW revisited the college premium in 2021, finding it had grown to $1.2M in the sequel to The College Payoff.

But there are major methodological problems CEW has never addressed. In neither report did CEW account for the direct cost of attending college (tuition, fees, room, board) or the opportunity cost (not working full time). In the original, CEW lampoons a strawman critic who suggests students could beat the college premium by investing the cost of college instead: “the multimillion-dollar payoff assumes that neither the principal nor the yearly profits on the investment will be used for 40 years. However, it is absurd to suggest that people with a high school education are likely to leave their investments untouched for 40 years.” Putting aside the question of whether CEW is patronizing people with a high school education, the Fed’s Douglas Webber begs to differ. He calculates that if your total cost of college is $50,000 per year or more, the odds of coming out ahead today are no better than a coin flip.

More damning, neither report attempted to account or control for the fact that characteristics that facilitate degree completion (i.e., post-high-school cognitive and non-cognitive skills, persistence, stability, health, family support, wealth) are all likely to lead to an income premium whether or not a degree is earned or college is even attempted. There was no word in either report about self-selection in the college-completing population despite obvious wealth and racial gaps or the value of randomized controlled trials (i.e., students with similar characteristics assigned to college and not-college groups) in order to attempt to quantify a real college premium. The consequent conspicuous conflation of correlation and causation makes me wonder whether the report’s propagandists have gained the critical thinking skills college is supposed to impart. Meanwhile, colleges, universities, and their policy-maker-alumni continue to rely on The College Payoff franchise like EduBirdie clients rely on plagiarism. (Related, I’d be interested in a CEW study on the college premium for EduBirdie clients.)

Then last month, perhaps in response to the growing flock of EduBirdies, CEW came out with new report titled After Everything: Projections of Jobs, Education, and Training Requirements through 2031 that doubled down on degrees. CEW forecasts that by 2031, employer demand for workers with degrees – associate’s + bachelor’s + graduate/professional – will grow by 22M, from 72M to 94M. While the projection seems authoritative, in part because CEW shows job growth for nine different sectors, the basis for the calculation is data from the US Census Bureau, Bureau of Labor Statistics, IHS Markit, and Lightcast. I’m familiar with these sources and have no idea how someone could use them to conclude that demand for candidates with degrees will grow by 22M by 2031 exclusive of candidates with industry-recognized certifications, certificates, apprenticeships, and other skills-based pathways. Nowhere does the report substantiate or even argue anything inherent in these incremental 22M jobs that would demand degrees as opposed to alternative forms of postsecondary education and training.

CEW’s problem is that hiring decisions are a result of employer behavior. In order to believe this newest degree disinformation, you’d have to assume employer preferences remain unchanged i.e., roles previously filled by college graduates will continue to be filled by college graduates. But the evidence is that preferences are changing quickly. In the last year alone, Opportunity@Work’s Tear the Paper Ceiling campaign has prompted thousands of companies to remove degree requirements from job descriptions. At least 16 state governments are doing the same while Colorado appears likely to become the first state to require its agencies to run apprenticeship programs. You’d also have to assume government policy remains unchanged in terms of subsidies for college at the expense of alternatives – currently running at about 1,000 to 1 – or that if funding shifts, students will continue to prefer degrees.

But we don’t have to go that far to doubt CEW’s new report and accompanying authoritative press release on November 16: “Degrees Will Increasingly Dominate Job Growth in US.” While the highlight of After Everything is a handful of charts seemingly connecting job growth with degree requirements, the narrative describing job growth by industry is more mealy-mouthed, along the lines of “positions that require postsecondary education or training” rather than degrees e.g., “Postsecondary education is no longer just the preferred pathway to middle-class jobs—it is, increasingly, the only pathway.” (Note: postsecondary education in general, not the rigid-monolithic, slow, and expensive form which has evolved in the U.S. thanks to federal and state government subsidies.) Further casting doubt on CEW’s conclusion is the statement that “college-educated workers are less likely to be replaced by automation because employers are more willing to offer retraining opportunities to them than to high school-educated workers.” What do the authors cite for this dubious proposition? A paper from 30 years ago when digital transformation was but a twinkle in Steve Jobs’ eye.


In the interest of piling on, I’d be remiss in failing to mention that CEW’s new report makes no mention of the experience gap and the likelihood that it’s about to become a chasm for college graduates for two reasons: (1) generative AI; and (2) remote work.

As I wrote earlier this year, AI is about to transform all good entry-level jobs the same way automation has already vamoosed entry-level jobs in cybersecurity. A decade ago, a college graduate with a modest technical background could get a job in a security operations center (SOC) as a tier I analyst: the first row of defense determining whether alerts could be ignored, or needed to be resolved or elevated. Today, most of that work has been automated. So entry-level positions in SOCs are what used to be called tier II, which means a CISSP certification, which means years of experience.

By automating the menial/grunt work that’s always been a major component of good entry-level positions – resulting in some level of productivity while learning the ropes – AI will invert employer expectations for new workers. As with cybersecurity, entry-level position descriptions will incorporate higher value work and ultimately become unrecognizable as entry-level jobs. Qualifying for these jobs will require meaningful work experience. According to a story in the Washington Post last week, it’s already happening:

“It’s been really difficult,” said Christian Torres, 24, who graduated this spring with an electrical engineering degree from Arizona State University and is still looking for work. “Even the entry-level engineering jobs want four or five years of experience. There’s no way to compete, so I’m still living at home, still looking for work.”

The advent of remote work will make an even bigger hash of career launch. With less ability to supervise and mentor new employees, hiring unproven candidates becomes riskier. And the best way to determine whether a candidate is likely to prove out won’t be where she went to school or what degree she earned. The best way will be to look at relevant work experience.

The common thread between AI and remote work is that employers will be taking less risk with new hires. That spells a dire narrowing of economic mobility, particularly for a system of career launch so heavily weighted to tuition-based colleges and universities in the habit of producing degree-completers with no relevant work experience.

One solution is for the government, accreditors, and/or boards to require paid in-field internships before graduation. But only a handful of universities in the country do this, the two most comprehensive being Northeastern and Drexel. By the time they graduate, Drexel students complete two or three 6-month paid internships, resulting in 12-18 months of relevant work experience – not coincidentally, the level of real work experience an increasing percentage of good jobs are demanding. As a result, 87% of Class of 2022 Drexel grads landed jobs in their chosen fields at an average starting salary of nearly $70K.

Can Northeastern and Drexel be replicated? It was recently pointed out to me that one reason Northeastern and Drexel were able to build impressive co-op programs is that they were originally night schools; Northeastern began by offering night classes in a Boston YMCA; Drexel’s evening school was founded in 1892. So they’ve always been oriented to employment and were able to cultivate large ecosystems of dedicated employers. But this raises the question of whether successful co-op programs are flukes of history that are unlikely to happen again. Regardless, American higher education needs to figure this out. Because without systematic co-op programs, the likelihood that the college premium holds up a decade from now – if it was ever $1M to begin with – is about as strong as a Soft Kid.


To be fair, CEW isn’t the only Georgetown center that had a bad month. The director of strategy at Georgetown's Center for Security and Emerging Technology, Helen Toner, is one of the (now former) directors of OpenAI who tried to fire Sam Altman. According to the New York Times, she made the argument that because the board’s mission was to “benefit… all of humanity,” her duty could be to destroy the company. Predictably, Toner attracted all kinds of egghead-academic vitriol from Silicon Valley Twitterati like Vinod Khosla, an early investor in OpenAi, who warned that “fancy titles like ‘Director of Strategy at Georgetown's Center for Security and Emerging Technology’ can lead to a false sense of understanding of the complex process of entrepreneurial innovation.”

Toner’s real problem was that she graduated from college nine years ago and had no prior experience as a board member, particularly in an organization responsible for oversight of an $80 billion private company with 770 employees. Not coincidentally, only one of the four authors of the recent CEW report has any private sector experience, and that’s primarily with the Chronicle of Higher Education – a fine publication, but hardly a pillar of free enterprise. So while Georgetown’s soothing self-talk might make sense in theory, it provides “a false sense of understanding of the complex process of [employer hiring].”

On second thought, maybe requiring relevant work experience isn’t such a bad idea – at least for Georgetown centers.