The College Affordability Crisis
College is inaccessible for many Americans and the economic impact of COVID-19 has made it harder for many students to afford their tuition. According to a recent survey by OneClass, more than half of college students can no longer afford the cost of college.
The College Savings Foundation found that over 50% of the 2020 high school graduating class said that the economic effects of COVID-19 will impact their decision about higher education.
The COVID-19 pandemic isn’t the only cause of this crisis; rather, it has exposed the seriousness of a problem that already existed and accelerated the impact of rising tuition costs. The cost of education in the U.S. has skyrocketed, almost 8 times faster than job wages. The average price of a four-year school has more than doubled in the last 50 years, creating an average of $37,500 in student debt.
These economic factors are pushing high school students away from post-secondary education and into alternative paths. However, there aren’t many career paths available to high school graduates that lead to a well-paying career without first bearing the cost of higher education upfront. Those that do exist, like many trade occupations, are struggling to attract candidates.
The Impact on Businesses
Meanwhile, businesses are struggling to find skilled labor, and thousands of jobs remain unfilled. Job seekers lack the skills that employers need, and the skills gap is projected to continue to grow over the next ten years. A labor market built on degree requirements and student loans is in crisis.
Colleges and universities, while leaving most students in significant debt, aren’t producing workers with the skills that employers need. That’s why many college graduates are underemployed after receiving their degrees. Our current system isn’t providing the right job training for jobs in 2021. The average small company is already spending over $500,000 on training new employees, and 62 percent of executives expect to need to retrain or replace more than a quarter of their workforce within the next five years.
Faced with a labor shortage, many businesses have lowered their qualifications for hiring and have begun offering more training to new hires. This is especially prevalent in industries like manufacturing, where it is becoming more common for workers in occupations such as welding or CNC machining to be hired with no experience and trained on the job. A similar approach is being taken by technology companies introducing new programs to train software engineers and web developers internally, along with increasingly more common Coding boot camps and certificate programs that provide an alternative to traditional degrees. This approach comes with its own set of challenges, and many businesses experience challenges with providing adequate training.
Apprenticeships are a Solution
Businesses need to prepare for a future where college is increasingly inaccessible for many Americans and develop strategies for educating and training their workforce. It’s time that businesses turn to apprenticeships to develop talent and solve their workforce challenges.
Apprenticeships are a structured and standardized approach to on-the-job training, combined with technical instruction that supplements training and builds knowledge to apply on the job. This training model allows businesses to equip workers with the skills that they need while allowing high school graduates to start a career and develop skills while earning a paycheck instead of racking up debt.
In the United States, apprenticeship programs are commonly associated with trade occupations such as Electrician or Plumber. There is a stigma around apprenticeships in our country – for many, they are seen as a lesser alternative to college. The reality is that apprenticeships are available in thousands of occupations across all industries. Apprenticeships have been around for hundreds of years. Businesses should recognize the value of on-the-job training and providing their own education. A college degree isn’t necessary for all jobs if the proper training infrastructure is in place. The apprenticeship model has been successful in many European countries, where it’s a common path to a career in many occupations across business, healthcare, technology, and engineering.
In addition, providing education and on-the-job training can help businesses attract and retain workers in a competitive market. Education is becoming a highly valued perk in the eyes of job seekers. Investing in upskilling and retaining your best workers is proven to be cheaper than hiring and training new employees.
Apprenticeships are the future of job training and education, and they benefit everyone. For individuals, it provides an opportunity to learn a valuable skill and start a career without the burden of student loans. For employers, apprenticeships can help close the skills gap by attracting new talent and training employees in the skills that are most needed.