Maybe It’s Time for a Gap Year: Is Traditional College Still Worth the Cost?

The Price of College Versus Emerging Alternatives

In the 2022-23 academic year, more than 50 percent of students were enrolled in at least one online course. Students and parents are feeling let down — paying full price and taking on student loans for an education that won’t offer the benefit that college offered for older generations.

Higher education was already undergoing a transformational period before the COVID-19 pandemic, with the skyrocketing costs of traditional college being weighed less and less favorably against online alternatives. It appears that the pandemic accelerated this trend dramatically.

Is traditional college still worth the cost? Maybe and maybe not, but it certainly is time to look at alternative approaches.

Investing in College in the Post-COVID World

A recent report by The HEA Group on college in the post-pandemic world makes a stunning revelation: over a thousand colleges show graduates making less than a high school graduate ten years after graduation. A college degree has always had the promise of higher earning potential and access to  the ‘American Dream.’ What this data tells us is that not only is that logic a fallacy, but for many graduates, the opposite is true.

However, college still remains a mixed bag. According to Kevin Carey, Director of the Education Policy Program at New America, “Average statistics are just that — averages. A degree has never been a guarantee of anything. But leaving college during a hot labor market, even if it’s also good for less educated workers, is immensely superior to graduating into the aftermath of a recession.” 

The Price of College in the US

As of May 2024, the average price for tuition, fees, room, and board for an American college student was $38,270. If you look only at private four-year schools, the average was $58,628. Student loans can amount to a huge debt load, not dissimilar to some home mortgages, which is pretty ironic given that the one thing most college students don’t learn is basic money management.

A college education for most people today is considered a means to good employment; it is a financial decision through and through. Sure, there are some people who can afford to take courses in “Fantasy Literature: Harry Potter” (Ohio State University) or “Zombies in Popular Media” (at both Columbia College Chicago and University of Baltimore). Most students, however, select a major as a means to an end: getting a job that pays them enough money to pay off their student loans and make a good living. (By the way, despite popular misconception, it is possible to discharge student debt in bankruptcy, but that’s a different discussion.)

But, as Carey mentioned, investing in college doesn’t guarantee success. Indeed, a student attending a poorly regarded college may very well earn less over the course of their career than if they had not attended college at all.

Over the past decade or so, a growing number of thought leaders have predicted the demise of higher education. Indeed, Nathan Harden prophesied in his groundbreaking 2012 piece for The American Interest that: “In fifty years, if not much sooner, half of the roughly 4,500 colleges and universities now operating in the United States will have ceased to exist. The technology driving this change is already at work, and nothing can stop it. The future looks like this: Access to college-level education will be free for everyone; the residential college campus will become largely obsolete; tens of thousands of professors will lose their jobs; the bachelor’s degree will become increasingly irrelevant; and ten years from now Harvard will enroll ten million students.”

The Imminent Collapse of the Private University

The real story of the American higher education bubble has little to do with individual students, their debt, or employment problems. The most important aspect — the one we will soon be hearing much more about — concerns the impending financial collapse of numerous private colleges and universities, as well as the likely shrinkage of many public ones. And when that bubble bursts, it will end a system of higher education that has been steeped in a culture of exclusivity. 

The Rise of Online Education

Early versions of online courses appealed to students who could not easily maintain a regular schedule like those who worked full-time jobs or didn’t otherwise have time to attend in-person classes. At the same time, major universities were beginning to introduce hybrid online courses into their regular program offerings. Although most saw these as an added benefit for their traditional students, rather than as tools to build completely new markets for nontraditional customers. This was pre-pandemic and the calculus has very much changed since.

A number of different online platforms have been erected over the past decade that can potentially serve as an alternative to traditional college. You’ve heard of MOOCs, right? If not, you are behind the times. Massive Open Online Courses (MOOCs) are a cheaper alternative to traditional education. Sites like Khan Academy, CourseEra, edX, and Class Central offer expert-led classes, as well as some classes hosted by universities, in every field, from computer science to humanities, in a cheaper and more flexible environment.

Recognizing and Accepting Alternatives to Traditional Degrees

Over time we will likely see very large employers partner with educational providers or universities to create curricula designed to teach students entry-level skills. Combine that with some online personality testing to make sure the student can be a good employee, and what you get is a student who graduates with a diploma and a job.

If this sounds a little like vocational school to you, you’d be right. At the core of my view is that most post-secondary education in the United States has stopped being about a classical education steeped in literature, poetry, drama, philosophy, and languages and has become more about pre-professional education designed to get one ready for a specific career.

In any event, the cost will be so low and the benefit to employers so high, that I expect we will see employers paying the tuition in the form of student loans that are forgiven after a few years of employment.

Let’s Party Like It’s 1929

Excuse the attempt at humor, and nod to Prince Rogers Nelson, but I agree with Nathan Harden’s view of the inevitable future of post-secondary education in the United States: most four-year colleges will be out of business. 

The elite schools of today will continue, and many more people than today will be able to earn degrees bearing their names. Will some traditional colleges survive? Sure, and they will be attended in large measure by graduates of high schools such as Chapin, Collegiate, St. Anne’s, Phillips Exeter, and Dalton. Get my drift?

So, Is Traditional College Worth It?

The GI Bill, in my view, started the college degree bubble. That bubble already started to slowly deflate before the pandemic largely because (a) the cost of tuition has increased roughly eight times faster than wages (more statistics at the National Center for Educational Statistics), and (b) a technological revolution has made online alternatives possible. Colleges are already seeing lower enrollment than ever before and that is only expected to increase in the coming years.

If my kids were a little older, maybe I’d be brave enough to break the social contract and encourage them more strongly to consider alternatives to traditional college. I won’t do that, but if your kids are younger or if you don’t yet have kids, it may be something to consider.

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[Editors’ Note: To learn more about this and related topics, you may want to attend the following on-demand webinars (which you can view at your leisure, and each includes a comprehensive customer PowerPoint about the topic):

1. Affordable Housing/Community Improvement Investments
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This is an updated version of an article originally published in January 2015 and updated August 5, 2020.]

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