Is Your Degree Working as Hard as You?
- Vidhi Sikarwar
- Oct 28
- 7 min read
Writer: Vidhi Sikarwar
Editor: Samarveer Singh
Have you ever seen an ad like this…
…promising skills that can get you job-ready fast? Did it make you question your college degree?
Because you wouldn’t be alone.
There seems to be a trend of declining confidence in higher education and its values amongst youth today. The United States, especially, has seen a drop in student enrollment with the “erosion of public confidence in US higher education”. Between 2008 and 2023, nearly 300 colleges and universities closed, with more than 60 per cent of those operating for-profit. While there is still an overall preference for higher education, to what degree (quite literally)? This article looks at factors that seem to be convincing students that the returns from education might not be worth the monetary and temporal costs. It then breaks down the resulting trends and their implications.
Causes Behind the Decline
While blaming the COVID-19 pandemic for a fall in enrollment seems like an attractive option, the causes run much deeper than that. The pandemic only exacerbated an already existing issue, as by the time it hit, US colleges had already seen a drop of 2.5 million students as compared to 2012. At the forefront of this issue lies a mix of increased impatience, hiking costs versus declining returns, and a misalignment of college degrees with the job market.
The desire to enter the workforce early is increasing among incoming students. Trapped in the paradox of needing experience to get a good job, but needing a job to gain experience, today’s youth are anxious to start as early as possible. When the competition is so cutthroat, one can only grow impatient. Therefore, if one has to be met with uncertainty eventually anyway, a four-year degree starts to look like too much commitment. Especially when that commitment is costing you a fortune.
Rising education costs are further discouraging students from pursuing college degrees. A survey of 1000 US parents found that while most parents felt optimistic when their children gained admission, only about half felt financially prepared to pay the tuition. India has a similar trend, where average education costs have been increasing at a rate of 8-10 per cent per year, implying a potential doubling every 6 to 7 years. Costs internationally are exceeding many people’s ‘willingness to pay’. As families question whether the financial burden is justified by future returns, many students are delaying or forgoing higher education altogether. They’re instead exploring shorter, cheaper alternatives such as certifications or direct entry into the workforce.
The trend in returns on higher education seems to be weakening, as students increasingly perceive a disconnect between the skills imparted in college and the realities of the workforce. Many graduates feel that the cost of their degrees does not align with how job-ready those degrees make them, creating frustration around both financial and professional payoffs. In the U.S., for example, research shows that more than half of bachelor’s degree holders are in jobs below their qualification level just a year after graduating, and nearly half remain so even a decade later. Together, this evidence underscores a troubling pattern that while higher education still promises to enhance skills and knowledge, it may not always deliver proportional labour-market returns, making the initial investment of time and money far less compelling for many students.
While the falling returns to higher education may seem alarming, some economists argue that this trend is both expected and not necessarily detrimental. As economist George Psacharopoulos from LSE highlights in his paper, the decline in private wage returns is largely a byproduct of education’s expansion. When more people attain degrees, their scarcity value diminishes, making higher education less of a distinguishing edge and more of a baseline requirement. This reflects the principle of diminishing marginal returns - basic literacy and numeracy deliver the largest wage gains, while the incremental boost from tertiary education is naturally smaller, especially as enrollment rises. This effect is not uniform across the globe. Returns to higher education remain relatively high in developing countries, where skilled labor is scarce, even as they decline in wealthier nations where degrees are already widespread. In other words, the falling return on investment does not necessarily mean higher education has lost its value. Rather, it signals a shift in its role, from being a competitive advantage to becoming a prerequisite for participation in the modern labor market.
A Look at Trends in India
India’s higher education landscape presents a distinctly different picture from that of the U.S., characterised by expansion rather than contraction. Over the last decade, India has seen significant growth both in the number of institutions and in student enrollment. For example, state private universities grew by 26.4% between 2011–12 and 2021–22. Much of this growth reflects a strong demand for professional and technical education, with engineering and medical programs still perceived as the most secure pathways to upward mobility. Yet this emphasis raises the question of balance. As Francisco Marmolejo and Tara Beteille note, “while we have focused on technical education, this is not the only area worth investing in. For, no advanced economy trains only engineers or doctors. It also prepares educators, administrators, social scientists, lawyers, historians, philosophers etc.” India’s system, while expanding, risks becoming overly concentrated in a narrow band of disciplines, potentially limiting its long-term returns.
At the same time, quality remains a persistent challenge. Despite rapid growth, India faces low levels of student learning, weak employability outcomes, limited research capacity, and a lack of innovation. According to a report by Mercer-Mettle, only 42.7% of Indian graduates are employable. These shortcomings are tied to underinvestment in R&D, with resources heavily skewed toward a handful of technical fields. India spends only about 0.65% of its GDP on R&D, which when compared to global leaders like the US (3.59%) and China (2.56%) amounts to a very low number. As a result, while degrees may be numerous, their ability to translate into meaningful employment and innovation is uneven. Without systemic improvements, higher education risks producing graduates who are credentialed but not fully prepared for the demands of a modern labour market.
There are, however, initiatives that suggest progress. The Technical Education Quality Improvement Programme (TEQIP), launched to strengthen technical education through funding and reforms, has helped institutions create placement cells that bridge the gap between education and employment. These cells not only connect students to industry but also emphasise soft skills such as communication, teamwork, and time management, improving work readiness. In addition, Indian universities are gaining greater autonomy, which some argue could propel them up global rankings by fostering research-driven, industry-ready reforms. Trends like vocational training, data analytics programs, hands-on learning, and international collaborations signal that the system is adapting to align more closely with labor market needs. Still, while these developments are promising, the broader challenge of quality and inclusivity must be addressed if India’s expanding higher education system is to yield consistently strong returns.
A Rising Focus on Skills
Alongside debates over the value of higher education, hiring practices themselves are undergoing a major shift toward skills-based evaluation. With the rapid rise of AI, companies face a widening gap between the advanced technical capabilities they require and the skills available in the labor market. They’re shifting focus to adaptability and problem-solving over credentials alone. Surveys show that at least 30% of Indian firms have formally adopted skills-based hiring, compared to a global average of 19%. This shift has fueled demand for expertise in areas such as AI, machine learning, data science, and cybersecurity, with employers increasingly open to candidates from non-traditional educational backgrounds who can demonstrate proficiency. At the same time, companies recognize that fresh recruits will often be trained on the job, so they place equal weight on traits like attitude, aptitude, and adaptability - with some calling the last “the most critical asset” for employability.
Still, degrees have not been rendered obsolete, as two-thirds of Indian professionals continue to view traditional degrees as essential for long-term career growth, and industry leaders stress that while “degrees are foundational, skills are transformational”. In practice, this means higher education now functions less as the final determinant of employability and more as a base on which specialized skills and professional credentials must be layered.
The effect of this shift has been a change in student preferences toward shorter, skill-based programs that promise employability faster and at lower cost. In the United States, trade school enrollment has risen by nearly 5% between 2020 and 2023, reflecting growing interest in vocational and technical pathways over traditional college models. A similar pattern is visible in India, where students increasingly pursue online certifications in data science, AI, digital marketing, and cybersecurity through platforms like Coursera, Udemy, and upGrad, often alongside their university degrees. Professional credentials such as the CFA, CPA, and FRM have also seen rising demand as students look to stack market-recognized qualifications that enhance their employability. According to a Deloitte article, this trend has fueled a proliferation of alternative pathways, from apprenticeships and micro-credentials to competency-based degrees, with universities themselves reconfiguring programs into shorter, modular segments that better align with workforce needs. Together, these developments suggest that higher education is no longer an inflexible investment in a single degree, but rather a continuous process of layered upskilling, reflecting both employer expectations and student pragmatism in a rapidly changing job market.
Conclusion
The trend around the perceived value of higher education reflects both rising impatience with costs and a shifting focus toward skills. While many students now turn to certifications, online courses, and micro-credentials as quicker routes to employment, these short-term pathways are best seen as complements rather than substitutes. Micro-credentials prove what people can do today, helping them secure jobs faster in a competitive market, but college degrees remain the foundation for long-term career building and growth. Higher education is not becoming obsolete but is instead evolving to be part of a broader, layered approach to learning. Students should not lose hope if immediate returns appear limited, because the enduring value of a degree often becomes clearer over the span of a career.
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