The Biden administration’s plan to forgive up to $20,000 in student loans has been welcomed by many borrowers. However, this does not solve the underlying problem, which is the cost of higher education in America. According to some estimates, we will be back to $1.6 trillion in student debt just five years from now.
College ROI is broken, and Americans know it. More than half of adults do not think the economic benefits of a university degree outweigh the cost. In recent years, most universities have experienced a decline in college enrollment. At a time, more than 90% of HR professionals say they appreciate the rise of alternative degrees that teach job-related skills, just as one company after another proudly announces the removal of the college degree requirement for job applicants.
So should students forgo college? Not if they want to make more money. College generally remains the best route to higher-paying careers, with lifetime earnings 84% higher for college graduates than for those whose highest qualification is a high school diploma. My conversations with HR professionals also suggest that changes to company policy don’t necessarily translate into actual hires of people without degrees.
The “return” to going to university is clear; it is “the investment” that is the problem. To fix the return on investment equation for students, we need to make higher education more affordable. The reality is that free college is already within reach for millions of Americans, but only if two-year college degrees are counted.
The two-year associate degree, typically conferred by community colleges and primarily seen as a stepping stone to a four-year degree, deserves a more prominent place in the landscape of American higher education.
The number one reason is cost. Community college is already essentially free for those who need support the most. Since 2009, the average first-time full-time student at a two-year college has received enough financial aid to cover all of their tuition and fees. At two-year colleges, the average tuition and fees are $3,800 per year, while the estimated expenses for supplies and textbooks are $2,400 per year. For students who receive the maximum Pell Grant of $6,895, federal grants can cover both categories and qualify for an additional $695 for living expenses. It is a fully funded college for students and more, today.
A two-year college degree easily passes the ROI test with decades of graduate earnings data. Individuals whose highest level of education is an associate’s degree earn 51% more than high school graduates without college. The opportunity cost of a two-year degree is also more manageable for students who need to earn a living while leaving the door open to pursue a bachelor’s degree later in their career.
Two-year colleges originated in the United States over 150 years ago contribute to broadening access to public higher education. Today, there are over 1,000 community colleges in the United States that serve this purpose. However, we should not treat community college as a funnel leading to a bachelor’s degree. Instead, we should use this existing infrastructure across the country to reinvent the associate degree as a stand-alone career-enhancing degree.
As workforce needs evolve and encompass educational paths beyond a bachelor’s degree, an associate’s degree is the obvious next option that is already free for many Americans and has been proven to increase the income for life. The benefits of a two-year degree will be enhanced as degree programs better align with workforce needs. We need community colleges and other institutions of higher learning to design more associate degrees that incorporate job skills training. Students must graduate from a community college with both an associate’s degree and an employer-approved certificate in areas such as analytics, coding, or marketing.
Reinventing the two-year college degree could not only prepare students for jobs, but also save liberal arts education as we know it. Associate degrees will continue to serve as a pathway to a four-year college and will help many students reduce the overall cost of their education. As the son of a college teacher, I was only able to attend Boston University by transferring my classes to a community college.
The vast majority of students who attend community college do so with the intention of moving on to a four-year degree program, but only 13% of students starting community college earn a bachelor’s degree in six years. Clearly, the four-year college degree doesn’t work for the vast majority of Americans: 39 million adults started four-year programs but did not graduate.
The data is indisputable: We need to stop telling high school students that going into debt to get a bachelor’s degree is the only path to the middle class and above. As the return on investment of traditional college deteriorates, GenZers will not blindly accept the debt incurred by previous generations. A recent study revealed that nearly half of students aged 14 to 18 believe post-secondary education should be two years or less.
Now is the time to recognize that a four-year college degree is valuable (if you have the time and resources) – but two years of college education may be just what some people need to launch a career that supports their family without the burden of debt.
Aaron Rasmussen is the CEO and Founder of Outlier.org and the co-founder of MasterClass.
The opinions expressed in Fortune.com comments are solely the opinions of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
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