British Report Indicates that Higher Education Has Economic and Social Benefits

A British report on Higher Education entitled the “Quadrants” helps bring forward the idea that higher education has many secondary benefits beyond earning higher incomes. Education is often a process of learning about how to make money but it can also be seen as a process of personal enrichment. According to the November report from the UK Department for Business and Innovation Skills this enrichment makes its way into society in substantial ways. 

Direct benefits of education often include characteristics, social interaction, and accreditation and signaling benefits. The person develops to a higher level through advanced education. They are more able to deal with others as well as stronger in their marketability. Likewise, their personal characteristics become enhanced. 

An increase in the educational attainment in society has a marked wider benefit for society itself. Crime statistics, health, happiness, and just about everything else improves. Societal conflict decreases as members are more capable in understand differences. They are also generally less angry with immigrants and can navigate a way to deal with others.  This ability to see other perspectives increases civil activity and social cohesiveness. 

Businesses are particularly interested in economic growth and development. Approximately 20% of UK growth between 1982 and 2005 was a result of higher graduate skill levels. As each percentage point of society (1%) becomes educated the long-run productivity increases between .2% and .5%. On a higher level this means that 1/3^rd of all labor productivity between 1994 and 2005 were a result of higher education. 

The argument the report brings forward is that graduates in the regional economies improve the economy and lifestyles more than their expenses. This would mean there is an advantage to encouraging students to get an education and then work within the market they graduated from. Retaining these students within the country improves productivity and economic activity.

The three industries that seem to hire more graduates are innovative firms that engage in research, financial industries and creative industries. Innovative firm’s hire science graduates while financial and creative industries hire graduates from other areas. Those industries that are innovative, financial oriented or creative hire over double the graduates than other industries.

For those who seek to spark higher levels of entrepreneurship it is important to consider the report’s findings that higher educated people are more likely to engage in entrepreneurial activity. The productivity and training gains are twice the rise of wages which means companies get a higher return rate.  The economy has an easier time expanding when there is a willing and education workforce to do the heavy lifting.

Reference:

UK Department for Business and Innovation Skills (2013). The Benefits of Higher Education Participation for Individuals and Society: key findings and reports "The Quadrants".  (Bis Research Paper 146) Retrieved November 21, 2013 from https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/254101/bis-13-1268-benefits-of-higher-education-participation-the-quadrants.pdf

Sallie Mae's Report Indicates Parents Adjusting to Educational Costs

A Sallie Mae Report entitled How America Pays for College 2013 brings to light some important changes occurring in the financing of education. Parents and students are finding new strategies to adjust to increases in cost which include opting out of dorms, applying for grants, working more hours, and cutting back on things that are not necessary. Despite the growing cost of education students and parents still believe in the power of education and the ability to afford a better life. 

Even though a general trend of college costs has been increasing, over the last few years it has leveled out to $21,178 which is down from 2010. Yet parents and students are being more frugal and this could have some influence on the plateau and how long that plateau lasts. Wealthier families are spending a little more than middle class families while lower class families are pulling back on their expenses while attending school. 

How Students Are Paying for College:

Student Borrowing 18%

Parent Borrowing 9%

Parent Income & Savings 27%

Grants and Scholarships 30%

Relatives & Friends 5%

Student Income and Savings 11%

Parental spending on college declined a significant 35% from 2010 leaving children to find alternatives. On a positive note the 529 educational plans have been increasing for longer term savings. The information may indicate that the ability to pay cash for education is declining and there is a shift toward longer-term saving plans. It does help indicate a level of adjustment and sophistication in decision making as a direct adjustment to the educational and economic market. 

Parents from middle and upper class families were less worried about paying for their kid’s college. Lower income parents were still worried about the availability of financial aid, grants, and their incomes. The majority of people still see college as a way to work in an occupation they are interest in as well as the possibility of earning more money due to their educational achievements. 

The report provides a strong overview of current educational perceptions and they methods people are using to pay for their college education. It is full of information, charts, and graphs. Americans are finding ways to work around the difficult costs and choices they have to make. The report, as well as other reports this year from other organizations, indicates there may be a large shake up in higher education in the years to come. Good or bad the people will continue to adjust and change. 

How America Pays for College Report