Between the six-figure price tag and hefty student loan burdens, more students are questioning whether a four-year degree is worth it — and many are deciding the answer is no. Since the pandemic, there has been a noticeable shift in college enrollment trends. Although the decline in college enrollment leveled off in fall 2023, there were still 900,000 fewer undergraduates enrolled in college in the spring 2024 term compared with spring 2020, according to a recent report by the National Student Clearinghouse Research Center.

Moreover, only 22% of adults now believe that the cost of college is worth it if it means taking on education debt, according to a separate Pew Research Center survey. “That is sobering,” said Richard Fry, a senior researcher at Pew.

The changing perspective on the value of a college degree is influenced by several factors. Outcomes for workers without a degree are improving significantly. Young adults without a college degree are experiencing better economic conditions than they have in years, as indicated by Pew’s analysis of government data. Their earnings, which had mostly trended lower since the mid-1970s due to increased automation and a shift away from manufacturing and unionization, began to improve about a decade ago. This change was driven by falling unemployment rates and increased opportunities for workers aged 25 to 34.

“Labor markets have been really tight, and this has particularly benefited less-educated workers,” Fry said. As a result, the earnings and circumstances for workers with just a high school diploma or some college education have risen, making them “clearly better off than they were 10 years ago,” according to Fry.

Improving job opportunities for “new-collar” workers without a degree continues to steer more students away from traditional college pathways. “The societal choice presented to these would-be students — earn ‘decent money’ now or invest in a degree — is still heavily colored by labor shortages,” said Hafeez Lakhani, founder and president of Lakhani Coaching in New York.

Despite this shift, there is still a notable “wage premium” for college graduates. Earnings for young adults with a bachelor’s degree have also increased over the same period, maintaining the so-called “college wage premium.” According to the New York Fed’s latest data, annual wages for recent college graduates — those between the ages of 22 and 27 — are 67% higher than for those with just a high school diploma. “The rewards of getting a bachelor’s degree have not deteriorated,” Fry emphasized.

Various studies continue to show that obtaining a diploma is generally worth it in the long run. Bachelor’s degree holders typically earn 75% more than those with just a high school diploma. Additionally, the higher the level of educational attainment, the larger the payoff. A report from the Georgetown University Center on Education and the Workforce, titled “The College Payoff,” found that finishing college sets workers on a path to earn a median of $2.8 million over their lifetimes, compared with $1.6 million for those with only a high school diploma.

Adults with at least a bachelor’s degree report higher financial well-being than those with lower levels of education, according to a Federal Reserve study on the economic well-being of U.S. households. College graduates are also more likely to receive raises and benefit from more hybrid or remote work opportunities than workers at other education levels.

However, the rising cost of college and ballooning student loan balances have significantly influenced changing views about higher education. More than half (53%) of high school students are open to alternative paths, and nearly 60% believe they can be successful without a degree, according to a study by ECMC Group.

At Virginia’s Fairfax County Public Schools Adult and Community Education, which focuses on career and technical training, “I have more students than I have seats,” said Paul Steiner, the program’s administrator. Interest in trade schools has surged, yet there is still some apprehension among students about pursuing skilled trades, partly due to a persistent bias against vocational school, especially if their parents went to college.

“That being said, more students are thinking twice about the opportunities available through apprenticeships or career training focused on credentialing versus a four-year path that would require student debt,” Steiner said. The rising interest in trade schools and alternative career paths reflects a broader shift in how students and families evaluate the return on investment in higher education.