Reassessment of the Value of Higher Education Diplomas - Research Paper Example

Academic Inflation AFFILIATION: Academic Inflation Education is the primary requirement of everyone and people who are planning to acquire the education of higher level have to be prepared for various challenges so that they can get the desired job in the market to make a successful career in their respective fields. Academic Inflation is the most popular term that is used by the business graduates globally as they have realized that the degrees that they are holding such as Undergraduate degree or Bachelor’s degree has depreciated in value and they will have to obtain higher level degrees to be compatible with the job specifications and requirements and to gain acceptance by the employers. The educational authorities have raised the minimum education level requirements in the educational institutions and organizations which have created a significant problem in the business world. It has been reported by the U.S. Bureau of Labor Statistics that the graduates completing their education lack the skills and qualifications required for filling a job as they have not been given proper training in their institutions (Lan & Winters, 2011). The cost of education has risen at an accelerating rate as compared to the increase in the financial aids that are provided by the federal agencies. According to SHEEO (2011), as people have insufficient funds available for covering the costs of college education, the number of graduates completing it has declined in the last few years. All of these factors have raised questions regarding the academic inflation that how lack of federal aids, increase in college/tuition fees, decline in wage increments and rising inflation rate are impacting the quality of college education. Academic Inflation Academic Inflation is described as the process by which the higher education degrees’ value gets inflated; it is the point at which the minimum level of education is required when the level of employment rises. In fact, there is no real need for highly skilled or trained employees for various jobs in the firms (Odland, 2012). As a result of the academic inflation process, the bachelor’s degree value has reached a level where the graduates face difficulty in finding a suitable position in the professional world and they have to acquire degrees of much higher level such as Master’s degrees and PhDs. The primary reason for such a robust growth in the academic field for higher level degrees is an accelerating rate of competition among the peers (Singell & Stone, 2007). Along with increase in the demand of higher level degrees, the cost of acquiring them has increased three times as compared to growth in the inflation rate. An increase in the cost of education is called the astronomical inflation which is a parallel process to that of academic inflation. In the last forty years, the household income has been recorded to increase by a factor of 6.5, on the other hand, the tuition costs of colleges has amplified by a factor of 15 within the state and 24 for out of the state students (Woodsworth, 2012). (Source: Martin & Gillen, 2011) Importance of higher education for students Education is important for everyone as it allows an individual to learn the dynamics of the professional world in which he/she will start the career. In order to gain entrance in the business environment, it is mandatory for the graduates to acquire relevant qualifications and trainings so that they are prepared to perform their jobs with perfection. According to Orsuwan and Heck (2009), a person who has not graduated from a high school can earn on average $23,452 per year which is less than the average wage of U.S. i.e. $41,444 per year. It has been stated that more than 68% of the population in prisons comprise of graduates who have never been to high schools (Zumeta & Kinne, 2011). An individual with an Associate of two-year degree or Arts degree from a college can earn approximately the average salary per year as depicted by the U.S. Bureau of Labor Statistics. However, students with a four-year college degree can earn on yearly basis $55,000 on average and post-graduate degree holders, Master’s degrees or PhDs can easily earn on average $65,000 per year or even more (Lan and John, 2450). Therefore, the statistics show that as the person acquires higher level of degree, he/she is eligible for much higher pay in the long-run. College education is getting expensive As the tuition fee of the colleges is soaring, the parents cannot afford to finance the high costs of colleges and that is why there is an increase in the number of students looking for jobs after completing their high school education (Calhoun & Kamerschen, 2011). The American Society has recognized that elementary and high school education is mandatory and it should be provided free to everyone especially young people; some of the states in U.S. have mandated attendance of the students till the age of eighteen but still about 15% of the population of U.S. has not even acquired a diploma in high school (Odland, 2012). As college education is voluntary and the fee needs to be paid by the people themselves; only 17% of the population of U.S. has been able to earn an Undergraduate degree (Woodsworth, 2012). The economists are predicting that the cost of attending various state colleges will increase to even higher amount which is about $120,000 by the end of years 2015. It has been reported by SHEEO (2011) that more than $40 billion in student loan debt amount has compelled many former students to face severe financial issues and some have even gone bankrupt (Martin & Gillen, 2011). Woodsworth (2012) stated that since 1986 till 2011, the inflation rate increased by 115.06% and tuition cost increased by 498.31%. It shows that the increase in tuition fees has increased at a faster pace in comparison with the inflation rate. For instance, if college tuition cost was $10,000 in the year 1986, then the new cost considering the growth in inflation rate would have been $21,500 but it has grown to $59,800 which is too high as compared to the inflation rate growth level. Reasons for growth in College Education costs The primary reason for increase in the costs of college education is the rise in overhead costs; both fuel and labor costs have increased and they are expected to rise at an accelerating rate in the future (Calhoun and Kamerschen, 2010). Some college buildings that have old architectural designs or lack some vital facilities required by students of present generation are undergoing the process of renovation or even replacement. Currently, the demands of extensive range of books in libraries and unique and well-equipped computer and research laboratories are soaring as well along with additional security needs of the colleges (Townsend, 2011). Other main reason for such an excessive growth in the amount of tuition fees is the loan provided by the federal agencies in the form of federal aids; the students who fall in the merit list of the aid requirements were even provided the scholarships. When colleges realized that the government is financing the tuition fees of many students, the colleges started increasing their fee amounts and shifted their focus on funding their own renovation projects. The federal agencies provide information to the colleges about the amount of financial aid and scholarships that they will be offering in the coming year. After getting the reports, the colleges start making their new academic year plans by incorporating additional cost that they will incur for providing enhanced facilities to the students. The additional cost is included in the college tuition fee which means that the cost of acquiring education gets expensive for the students. As a result, the loan amount of the students exceeds to a higher amount that may force them to either abandon their studies and look for a job or go bankrupt to pay back the loan (Lan & Winters, 2011). Impact of academic inflation on college education Generally, academic inflation is described as the inflation in both the academic qualifications and minimum requirements for jobs; there are many college students who are looking for the jobs that are compatible with their qualification level but there is only limited number of jobs that match their educational qualifications (Orsuwan & Heck, 2009). There is an increase in the demand of individuals who acquire higher qualifications; a Bachelor’s degree is insufficient for gaining a top position in any of the well-known companies. For instance, the brand manager position is filled by a graduate having Master’s degree along with years of experience in the field; although Bachelor’s degree is sufficient for acquiring the position as graduates are offered the opportunities of engaging in internships to gain first-hand experience (Odland, 2012). There has been inflation in the minimum degree requirements for most of the jobs as the employers are seeking employees who have either a Master’s degree or PhD or even post-doctoral degree. In some cases, it has been found that the advanced degree knowledge is unimportant for performing a specific job (Odland, 2012). According to Woodsworth (2012), the institutionalization process of the professional education has significantly impacted the number of opportunities that are available for the young workforce. The young people at work have only few opportunities for moving up in the organization by doing on-the-job learning as the employers are willing to upgrade that employee’s position who obtains an additional qualification or high level degree (Calhoun & Kamerschen, 2010). For example, a person working as a Finance Assistant Manager having a Master’s Degree will be promoted after acquiring a CFA or CIA certificate. The employers of almost all the organizations have developed a perception that an individual holding a certificate or diploma in a specific field shows that he/she will make valuable contribution in the organization’s performance. The study of Odland (2012) showed that there is no relationship between the graduates of college and achievement in the work as the college grades or certificates are not a predictor of the person’s achievement on the job. Conclusion The decline in number of students acquiring college education shows that there are rising concerns for the increase in college costs; the government will have to intervene to provide support to the students so that they are willing to acquire further education and even enhance their standard of living. Academic Inflation shows that the employers have to ensure that they hire those individuals who demonstrate an ability of performing a highly exceptional job. As the number of jobs available for non-college students is limited, it has become more important for the organizations to revamp their job descriptions. In order to boost the number of college education acquiring students, they need to be provided financial aid with flexible terms and conditions so that they are not hesitant in acquiring higher level education. For instance, the grant amount by government should be increased in accordance with the inflation rate so that more students are eligible for acquiring high level education. The educational institutions have to ensure that they offer those programs that will prepare the students for their professional life by offering only mandatory and relevant courses at affordable prices. It is the responsibility of these institutions to realize that their fee structures have increased by greater amount as compared to the salary structures of the residents of U.S. The academic inflation is forcing many graduates to acquire the highest level degrees so that they can get qualified for their desired jobs. However, the decline in the quality of workforce is an area of concern that should be addressed by the organizations as a high level degree does not give a guarantee that the employees have all the skills and knowledge required for performing the job. References Calhoun, J., & Kamerschen, D. (2010). The impact of governing structure on the pricing behavior and market structure of public institutions of higher education in the U.S. International Review of Economics, 57(3), 317-333. Lan, Y., & Winters, J.V. (2011). Did the D.C. Tuition Assistance Grant Program Cause Out-of-State Tuition to Increase? Economics Bulletin, 31(3), 2444-2453. Martin, R.E., & Gillen, A. (March 2011). How college pricing undermines financial aid? Center of College Affordability and Productivity, 1-16. Odland, S. (2012). College costs out of control. Forbes.com. Retrieved November 13, 2012 from http://www.forbes.com/sites/steveodland/2012/03/24/college-costs-are-soaring/ Orsuwan, M., & Heck, R.H. (2009). Merit-based student aid and freshman interstate college migration: Testing a dynamic model of policy change. Research in Higher Education, 50, 24-51. SHEEO. (2011). State Higher Education Finance FY 2010. State Higher Education Executive Officers, 1-78. Singell, L.D., & Stone, J.A. (2007). For whom the Pell tolls: The response of university tuition to federal grants-in-aid. Economics of Education Review, 26(3), 285-295. Townsend, R.B. (2011). History Faculty Salaries Fall Behind Inflation and the Rest of Academia. Retrieved November 13, 2012 from http://www.historians.org/perspectives/issues/2011/1105/1105new1.cfm Wodsworth, G.H. (2012). Sky rocketing college costs. Retrieved November 13, 2012 from http://inflationdata.com/Inflation/Inflation_Articles/Education_Inflation.asp Zumeta, W., & Kinne, A. (2011). The recession is not over for higher education. The NEA 2011 Almanac of Higher Education, 29-41. Read More