For generations, higher education launched Americans into lives of secure work, rising incomes, and civic participation. But today, as tuition outpaces inflation and confidence in higher ed falters—from just 10 percent of Americans expressing “very little” confidence in 2015 to 23 percent in 2025—a growing percentage of the public is no longer sure that investment pays off.
I get it. Younger generations are facing new challenges and tougher odds in economic mobility. Consider that 90 percent of children born in the 1940s ended up doing better than their parents. But the upward trajectory has declined sharply, and now only half of children earn more than their parents by age 30, according to research by economist Raj Chetty and colleagues.
For today’s children to fare better, we need to make college work for a more complicated economy.
I’ve been talking a lot about these issues recently in different venues, including at the Texas Tribune Festival, a gathering of leaders in politics, public policy, and the media. With moderator Scott Smallwood, co-founder and CEO of Open Campus, and fellow panelists Allan Golston, U.S. program president for the Gates Foundation, and Ruth Simmons, former university president and now distinguished presidential fellow at Rice University, our conversation centered on value.
Yes, earnings matter deeply when families are stretching to afford school. Yet the value of higher education also shows up as mobility, resilience, and the chance to do work that means something.
Earnings—and more
The big, hairy question in front of us is how to improve higher education for everyone—and that’s going to take real changes to systems that have long been in place. But it’s clear that we as a country need robust higher education opportunities for people to thrive.
Numerous studies have documented the value of college. Among the most recent, a report this year from the Federal Reserve Bank of New York found the return on investment for a typical college graduate of 12.5 percent, easily better than the threshold for a sound investment.
“Indeed, by comparison, the stock market has provided a long-term return of about 8 percent and bonds have returned around 4 percent,” said the report. It said the return has remained high because even while the cost of college has continued to rise, so have the returns.
And we know there are other benefits to a bachelor’s degree beyond the additional lifetime earnings compared with a high school diploma: People with college degrees tend to volunteer more, vote more, and support democratic ideals, for example. Higher education also promotes critical thinking, respect for diversity, and independent thought, and graduates are more likely to reject authoritarianism, according to research from the Georgetown Center on Education and the Workforce.
But for now, at least, wages are the most easily measured value. As a starting point, we should expect that college degrees and workforce credentials show their value by leading to jobs that pay at least 15 percent more than what could be earned with a high school education alone.
As we develop better measurements, we will look at quantifying the value that comes from success in job growth and career development, and the ability of graduates to become effective participants in their communities.
During our TribFest panel, Allan Golston reminded us that the Gates Foundation, in its own effort to measure the benefits of higher education, established the Postsecondary Value Commission in 2019.
“This was a new approach to measure value that includes who benefits from education after high school—and by how much,” he said. “That is so students and families can ask important questions about the returns from specific schools and programs.”
AI and opportunity
It’s easy to see that there are difficult tradeoffs. After all, the long-term value of college seems abstract if you’re saddled with debt and can’t find a good job after graduation. The New York Fed also reported this spring that unemployment among recent college graduates ages 22 to 27 was 5.3 percent. That’s compared with a U.S. unemployment rate of 4 percent in the same period, according to the Bureau of Labor Statistics.
And consider the effect of artificial intelligence on job prospects: A Stanford University study found that early-career workers in the occupations most exposed to AI have seen a 13 percent relative decline in employment. The study found evidence that “the AI revolution is beginning to have a significant and disproportionate impact on entry-level workers in the American labor market.”
AI disruption underscores the need for higher education credentials that can prove their value—ones that deliver skills that help students adapt to the changing world. Higher learning should also provide a skills jumpstart in the form of better opportunities for students to find internships and jobs related to their long-term goals while still in school.
Jane Swift, former governor of Massachusetts and president of Education at Work, has put it this way:
“Colleges can design work experiences that meet students’ immediate financial needs and build the skills, networks and confidence needed for life after graduation,” she said in a recent article for University Business.
“Expanding access to paid internships—through deeper employer partnerships or stipends for unpaid roles—is one important step.”
Options are important
In that environment, majors matter more than ever. The Georgetown center found that the top-paying college majors, typically in engineering, earn $3.4 million more than the lowest-paying majors over a lifetime. There’s a lot of mythology about students supposedly wasting their time in obscure majors without a payoff—the fact is, nearly half of college graduates finish with STEM and business degrees, according to Georgetown’s report, “The Economic Value of College Majors.”
But a major strength of American higher education is the breadth of options for students, according to Ruth Simmons, who previously served as the president of Smith College, Brown University, and Prairie View A&M University.
“I hope that one of the things that we’ll do is preserve and enhance those options so that it appeals to a wide variety of learners,” she said. “I believe in the value of education for everyone, and to me the best course is a healthy system that provides many different options so that more people can benefit from the system.”
Students should be able to choose from a range of promising options that suit their needs—not just the path they want to pursue, but their location, time, flexibility, learning style, and more. That’s another factor in delivering value.
The cost to our shared future
What decades of work has shown us is that affordability is a long-term issue, and the recent declining confidence is driven by the inability of many families to see a reliable payoff for their education investment. At the same time, we’re in a place where the demand for talent has never been higher. If higher ed can’t deliver, because of cost or other reasons, the nation faces a period of long-term decline in our overall well-being.
That’s why many leaders across higher education, philanthropy, and policy are setting their sights on a new national goal: ensuring that by 2040, 75 percent of working-age adults hold degrees or credentials of value, leading to economic prosperity. It raises the bar not only on increasing talent, but also on making sure credentials pay off through higher wages, stronger communities, and lifelong opportunity.
We’ve built a system where too many students pay more than they can afford for opportunities they can’t count on. That’s not sustainable for families, and it’s not sustainable for a country that depends on talent.
If we can align affordability, value, and trust, we can once again make higher education the engine of upward mobility. If we don’t, the cost won’t just be money—it will be our shared future.
This article was originally published in Forbes.