In the last several years the number of people that have received a college degree swelled to just over a third of the U.S. population—a significant increase over the previous decade. For many, it probably seemed as though the best bet to secure a good, high-paying job was to get a college degree and seek out white-collar opportunities, especially as manufacturing jobs steadily declined.
Yet those high-paying jobs can be elusive for college graduates, with large variations in outcomes across different majors. The projected income of the average early childhood education major ($34k 15 years post graduation), for example, is significantly less than the average mathematics and statistics major ($73k 15 years post graduation). Despite the underwhelming economic outcomes for certain majors, the cost of college tuition grew nearly 260% from 1990 to 2014.
The majority of students—an estimated 70%—need to take on debt to help cover the costs of college. When you do the math, it becomes clear that many degrees do not result in a significant increase in income. In fact, students who need to borrow to get their degrees might be losing money in the long haul depending on the degree they receive, how much they borrow, and the terms of their student loans.
This changing landscape has led many to re-evaluate education and the realization that success does not necessarily require a traditional higher-education degree. In a 2017 survey, 39% of respondents said they were considering alternatives to four-year degrees based on costs alone. While some schools are suffering from lower enrollment, there’s been renewed interest in vo-tech (Vocational Technical) schools and other schools that offer education tied to a specific career track.
Vo-tech leads the way
Trade schools have quietly been exploring a different educational model. While traditional higher-education promotes a generalist academic education, vo-tech schools have firmly kept their focus on offering convenient, affordable education that develops in-demand job skills. The curriculum is designed and frequently adapted with the end-game in mind: developing marketable skills in their students. Their focus on real-world applications, internships, fieldwork, and job shadowing appeals to students that hold immediate employment after school as a top priority.
As manufacturing jobs declined, trade schools shifted to other fields such as HVAC and health. HVAC technicians are projecting double-digit growth and with just a few years of experience offer similar (or better) salaries than the average college graduate can expect. While the average starting salary for a trade school graduate is still only $35,000 compared to nearly $47,000 on average for a college graduate, the cost of trade school is significantly lower. That said, specific trade schools career paths have very high starting salaries: such as radiation therapist at $70,000. Additionally, trade school graduates on average pay a total of $33,000 on their education versus roughly $127,000 for a Bachelor’s Degree. Factor in the costs of student loan financing over time and that difference is even more significant.
Trade schools directly address a gap in priorities that is visible in traditional schools: where the top priority of 60% of current students and 67% of recent grads is to find a job post graduation, but only 22% of college and university trustees say that preparing students for the workforce is the most important role of higher education. Adults looking to improve their earning prospects want their education to offer information directly applicable to their work and to landing a job in their specific field. Trade schools have adapted to this desire with a blended learning approach, combining lectures with experiential learning and other adult-learning strategies. The results are actionable steps that students can use immediately on the job.
Given their focus on the financial success of their students, it is no surprise that trade schools have also been some of the first to successfully offer outcomes-based financing for their students. One example is Income Share Agreements, where schools allow students to borrow the money they need to graduate and pay it back as a small percent of their income over a set number of years until a predetermined and reasonable cap is reached. Because trade schools are outcomes-focused, this success-focused financing model fits squarely within their mission of helping students achieve financial independence. By offering Income Share Agreements, trade schools prove that they stand behind their outcomes, understand the priorities of today’s students, and are actively closing the gap between what students and some traditional universities have viewed as the most important role of higher education.