Why Nearly Half of Americans Believe a 4-Year College Degree Is Less Important for High-Paying Jobs

The perception of higher education in the United States is undergoing a significant shift. A new survey from the Pew Research Center reveals that nearly half of Americans believe a four-year college degree is less important for landing a high-paying job than it was 20 years ago, via CNBC Make It. This change in attitude is driven by escalating tuition costs and the mounting burden of student debt.

A decade ago, the outlook on higher education was far more positive. In 2011, 86% of college graduates viewed their degree as a good investment, and in 2013, 70% of U.S. adults considered a college education "very important," according to Pew Research Center and Gallup surveys. However, recent data shows a stark decline in these sentiments. Today, 29% of Americans say college is not worth the cost, and 49% believe a four-year degree is less crucial for obtaining a high-paying job than it was two decades ago.

Rising Costs, Declining Returns

The report, which surveyed over 5,000 U.S. adults, points to the skyrocketing cost of college tuition as a primary factor in the changing attitudes. Over the past 20 years, tuition fees have significantly outpaced inflation. According to U.S. News & World Report, the average cost of tuition and fees at private colleges has increased by 144%, while public in-state tuition and fees have surged by 171% for out-of-state students and 211% for in-state students. This sharp rise in costs has left many students with substantial debt. Currently, outstanding education debt in the U.S. totals about $1.6 trillion, surpassing both credit card and auto debt. As a result, more people are questioning the return on investment of a college degree. Pew found that only 22% of U.S. adults believe the cost of obtaining a four-year degree is worth it, even if loans are required.

Wage gap narrowing

Although college graduates still earn more on average than those without a four-year degree, the college wage premium is shrinking. A recent report from the San Francisco Federal Reserve found that the wage gap between college graduates and high school graduates peaked in the mid-2010s but declined by four percentage points in 2022. Today, Bachelor’s degree holders earn about 75% more over their career than those without a degree.

Economists attribute this decline to more rapid wage gains for high school graduates. The Economic Policy Institute reports that between 2020 and 2024, young high school graduates saw a 9.4% real (inflation-adjusted) wage growth, compared to a mere 2.2% increase for college graduates.

"Job opportunities and wages have improved for less-educated young adults in the U.S.," says Richard Fry, a senior researcher at Pew and co-author of the survey. "This is, in part, because they have had more bargaining power in the tight labor markets of the last 10 years when employers had trouble hiring for both high-skill and low-skill positions," said Fry.

Despite the narrowing wage gap, a disparity still exists. In 2023, inflation-adjusted median annual earnings for young men (ages 25-34) with a four-year degree was $77,000, compared to $45,000 for those with only a high school diploma. For young women, the figures were $65,000 and $36,000 respectively.

Shifting job market

The job market is also evolving, with more employers dropping degree requirements for certain roles. According to Payscale, one in three companies no longer list educational requirements on their salaried job postings, opting for a skills-based hiring approach instead. This trend is gaining traction in sectors such as tech, consulting, and finance, with companies like Google, IBM, Deloitte, and Bank of America leading the way.

"Workers without degrees now have access to higher-paying jobs that they might not have been eligible for 10 or 15 years ago," Fry points out. However, he cautions that this progress could be disrupted by a potential recession. "Young, less-educated workers tend to benefit from a hot labor market with low unemployment rates," Fry explains.