Reassessing the Value of Education: The Cost-Effectiveness of Trade Schools vs. Colleges

Researching a question about a topic is great for developing content for a LinkedIn? article. So, for this article, I began my analysis with this question: Are trade school enrollments increasing while college enrollments are declining?

It seems the answer is yes. There’s been a noticeable trend where enrollments in trade schools and technical programs are increasing while traditional college enrollments are showing a decline.?

Skilled trade programs, focused on practical skills for specific jobs, have seen growth. This shift is driven in part by students’ desire to enter the workforce without the burden of substantial college debt. They want to take advantage of opportunities in sectors with high demand for skilled labor, with excellent income opportunities.

For example, graduates from an electrician trade school can expect varying salaries depending on their location, level of experience, and the specific industry they enter. Electricians start with an apprenticeship. The earnings are lower but increase upon completion of the apprenticeship and attainment of journeyman status. While specific figures vary, the median annual wage for electricians in the United States is often quite competitive. Many experienced electricians earn a solid middle-class income. The range for a middle-class income can vary depending on location and family size. In the United States, the definition of middle-class income ranges from 67% to 200% of the median household income.

Meanwhile, college enrollments have been experiencing a downward trend. Between 1985 and 2010, college enrollment increased at an average rate of 2.2% per year. However, from 2011 to 2021, there was an average annual decrease of 1.6%, with a notable 14.6% decline from the peak enrollment in 2010. This shift reflects a broader reassessment among prospective students regarding the value and costs associated with traditional four-year degrees.

Vocational and trade school programs are becoming more accessible and appealing because of financial support options like The Education Plan?, which covers various expenses associated with vocational training, offering a flexible and economically viable path for students interested in these careers.

This trend shows a significant shift in the education landscape, with more students considering alternative paths to traditional four-year degrees, driven by factors like cost-effectiveness, job market demands, and the desire for more direct routes into careers.?

So, what are the cost-effectiveness issues associated with a college education?

Financial Prudence: With rising tuition costs, assessing the return on investment (ROI) can help students and families make informed decisions about which degree programs are likely to lead to financial stability and job security.

Debt Avoidance: Understanding the cost-effectiveness of a degree can help prospective students avoid excessive student loan debt, which can have long-term financial implications.

Career Prospects: Students might consider degrees with a strong linkage to high-demand, well-paying jobs as more cost-effective, guiding them towards fields with better employment prospects.

To be fair, there are arguments for why a college education is of value to a student. They range from education as a public good, to not all benefits have to be monetary, to broadening one’s perspective. I somehow think that when a student loan has to be paid, these arguments become a bitter fruit.?

The average cost of attaining a bachelor’s degree in liberal arts varies depending on the institution and whether it’s online or on-campus. For online degrees, students can expect to pay around $19,282 to $19,581 in tuition at universities like Arizona State University and the University of North Carolina at Greensboro. Financial aid can offset these costs, with average aid amounts ranging from $9,250 to $10,278.

When considering the broader landscape of bachelor’s programs in 2024, the average tuition and fees for in-state students are around $11,827, whereas out-of-state students pay an average of $25,080. Adding in costs for books, supplies, room and board, and other expenses, the total cost of attendance for in-state students is about $28,838, while out-of-state students face about $42,092.

These figures highlight the financial considerations prospective students need to consider when choosing a program, alongside the potential benefits and personal value they ascribe to a liberal arts education.

FYI, the costs I mentioned are for one academic year, not for the entire duration of a four-year degree. To calculate the total cost of a four-year degree, you would multiply these annual figures by four, keeping in mind that tuition rates and fees can increase.

In industry, cost structures are always being analyzed for cost-reduction. I would submit that the cost structures of a college education are indeed ripe for cost-reduction analysis. By conducting a cost-reduction analysis, colleges and universities can identify strategies to reduce expenses to lower tuition costs or slow their rate of growth, making education more accessible and affordable for students.?

Several factors contribute to the increasing costs of higher education, making it a prime candidate for thorough financial scrutiny:

Tuition and Fees: These are often the most significant expenses for students. Analyzing the drivers behind tuition increases can help identify opportunities for cost containment or reduction.

Administrative Costs: Higher education institutions have seen a notable increase in administrative expenses. Evaluating the efficiency of administrative operations could reveal potential savings.

Facilities and Infrastructure: Maintenance and expansion of campus facilities contribute to overall costs. Institutions can assess these expenses for potential optimizations, such as energy efficiency improvements or shifts to more digital infrastructures.

Technology Investments: With the rise of digital learning tools and online education, evaluating the return on investment for technology expenses is crucial.

Financial Aid: Analyzing the allocation and impact of financial aid can help ensure that higher education institutions use funds to support students in need, reducing the net cost for those students.

Program Offerings: Evaluating the cost-effectiveness of various academic programs and departments can identify areas where higher education institutions may need to reallocate or streamline resources.

Operational Efficiencies: Identifying and implementing best practices for operational efficiency can reduce costs without compromising the quality of education.

A change is coming to education. The future looks bright for vocational models of education. The potential for a major shakeup in the traditional college education model is rearing its head.