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Usually, one will assume that having a college degree will be the perfect investment. According to studies, college graduates usually earn more in a lifetime than high-school diploma graduates. Generally, considering the cost of going through college and getting a degree can be seen as a good investment. But this is the case for a considerable number of young Americans, and for some, it is not a viable proposition from an economic perspective.

Several college graduates end up underemployed

For instance, for every 100 students joining college for a four-year degree on a full-time basis, only around 60 will graduate. Interestingly according to New York’s Federal Reserve Bank, 40% of the 60% of those that graduate usually become underemployed and end up taking jobs that can be filled with a high school diploma. Therefore for every 100 students who join college, only around 36 will graduate and get a well-paying in time job, which implies that college education is a risky investment. 

The New York Fed indicates that underemployed graduates can sometimes get jobs paying decently. For instance, long-distance truck drivers and welders are well paid, yet they do not need a college degree. Interestingly the college graduates would have gotten these high paying jobs without a degree at a younger age. Therefore there is a 50-50 chance that if one attends college, they will get a good job after a few years.

Cost of college high compared to returns

Equally, there is a perception that the type of field one majors and the type of college one attends can have a bearing on their return from a college degree. A college education can only be a good investment for select few who attend specific universities and major in select courses. For students who take large student loans to pay for a college degree in majors such as arts, then college education may not be a worthy investment.  

Therefore college education is a gamble and risky investment, and the risk has been growing in the last couple of years. This is because the earnings of less-educated and skilled workers have been increasing more than those of college graduates.