What Is Post secondary education?
Post secondary education refers to any formal education beyond high school. This broad category includes institutions like colleges, universities, and vocational schools, offering a diverse range of programs from certificates to doctoral degrees. Financially, post secondary education is often viewed as an investment in one's human capital, aiming to enhance skills, knowledge, and ultimately, future income and career prospects. It falls under the broader financial category of human capital development, which recognizes that investments in an individual's capabilities can yield significant economic returns over time.
History and Origin
The concept of formal post secondary education has ancient roots, with early universities emerging in Europe during the Middle Ages. In the United States, the development of higher education began in the colonial era, with institutions often founded by religious denominations. For instance, Harvard College, widely considered the first American college, was established in 1636 by the Massachusetts Bay colonial legislature to train ministers.4 Over centuries, the scope and accessibility of post secondary education expanded significantly, notably with the Morrill Land-Grant College Acts of 1862 and 1890, which provided federal land to states for the creation of colleges focused on agriculture and mechanical arts. The mid-20th century saw another surge in enrollment, partly due to the G.I. Bill, which provided educational benefits to returning World War II veterans, further cementing the idea of college as a path to upward mobility and a key component of the "American Dream."
Key Takeaways
- Post secondary education encompasses all formal learning beyond high school, including universities, colleges, and trade schools.
- It represents a significant investment in an individual's human capital, impacting future earnings and career stability.
- While offering substantial benefits, the rising cost of living and tuition can lead to considerable student loan debt.
- The pursuit of post secondary education is associated with lower unemployment rates and higher lifetime earnings.
Interpreting Post secondary education
Interpreting the value of post secondary education extends beyond just the academic credential; it involves assessing the potential return on investment (ROI) for an individual. This ROI can be measured in terms of increased lifetime earnings, improved job security, and enhanced career opportunities. While not every program or institution yields the same financial outcome, the general trend indicates a positive correlation between higher levels of education and economic well-being. Individuals considering post secondary options often engage in financial planning to evaluate potential costs versus benefits, including factors like future earnings potential and the impact of inflation on projected income.
Hypothetical Example
Consider two hypothetical individuals, Alex and Ben, both graduating from high school. Alex decides to pursue a four-year bachelor's degree in a field with strong job prospects, incurring approximately $80,000 in tuition and living expenses over four years, which she funds through a combination of scholarship and student loans. Ben, on the other hand, immediately enters the workforce after high school.
Upon graduation, Alex enters the job market with a higher starting salary than Ben. Over their respective careers, Alex's median weekly earnings consistently outpace Ben's, leading to a higher cumulative income over her lifetime. Although Alex took on debt and faced the opportunity cost of not earning income during her studies, her post secondary education provided her with specialized skills and credentials that opened doors to higher-paying jobs and greater long-term financial security.
Practical Applications
Post secondary education manifests in various practical applications across an individual's financial and professional life. It is often a prerequisite for entry into numerous professional careers, influencing an individual's career trajectory and earning capacity. Data from the U.S. Bureau of Labor Statistics consistently shows that workers with higher levels of educational attainment, particularly those with a bachelor's degree or higher, tend to have significantly higher median weekly earnings and lower unemployment rates compared to those with only a high school diploma.3 This statistical correlation makes post secondary education a key consideration in long-term financial planning and wealth accumulation strategies. Furthermore, a college education is widely recognized as a path to higher income and greater economic well-being.2
Limitations and Criticisms
Despite its widely acknowledged benefits, post secondary education faces several limitations and criticisms, primarily concerning its escalating costs and the burden of student loan debt. The rapid increase in tuition fees, often outpacing inflation, has made higher education less accessible for many, leading to a significant reliance on student loans. The accumulating debt can hinder borrowers' financial milestones, such as homeownership, starting a business, or saving for retirement. For instance, the Education Data Initiative highlights that student loan debt can lead to declined consumer spending and diminished markets, with a notable percentage of student borrowers delaying major purchases like homes and cars.1 Critics also point to the varying quality of programs, the potential for a low net present value for certain degrees, and the ongoing debate about whether the skills taught align sufficiently with current labor market demands.
Post secondary education vs. Vocational training
While both post secondary education and vocational training provide education beyond high school, they differ in their primary focus and outcome. Post secondary education, particularly at colleges and universities, often emphasizes broad academic knowledge, critical thinking, and theoretical understanding across a wide range of subjects, leading to degrees such as associate, bachelor's, master's, or doctoral. Vocational training, conversely, is typically focused on hands-on skills and practical knowledge directly applicable to specific trades or occupations, often resulting in certificates or diplomas for fields like plumbing, electrical work, or cosmetology. While post secondary education might lead to a more diverse set of career paths and potentially higher long-term earnings, vocational training often offers a quicker entry into the workforce with lower initial costs.
FAQs
What are the main types of post secondary education?
The main types include colleges and universities (offering associate, bachelor's, master's, and doctoral degrees), and vocational or trade schools (offering certifications and diplomas in specific technical skills). There are also community colleges which provide associate degrees and pathways to four-year institutions.
Is post secondary education always a good financial investment?
Generally, data suggests a positive correlation between higher education and greater lifetime income and lower unemployment. However, the financial return can vary significantly based on the field of study, the institution's cost, and the individual's career path and ability to manage student loan obligations.
How can I finance my post secondary education?
Financing options include personal savings, scholarships, grants (which do not need to be repaid), federal student loans, and private student loans. Many students use a combination of these methods. Financial aid eligibility often depends on factors like family income and academic merit.
What is the average cost of post secondary education?
The cost varies widely depending on the type of institution (public vs. private, two-year vs. four-year), residency status (in-state vs. out-of-state), and program of study. Tuition, fees, room and board, books, and other living expenses all contribute to the total cost.