Navigating Risky Higher Education Investments: Implications for Practitioners and Consumers

Abstract

This exploratory study examines academic and labor market risks associated with investments in higher education by synthesizing the literature regarding risky higher education choices and extending the research using the 2014 National Student Financial Wellness Study, a national sample of college students. Three phenomena are analyzed to support the notion that individuals may be making suboptimal human capital investment decisions: (a) cost–benefit errors; (b) unclear educational goals; and (c) increasing time-to-degree. The study examines which students are more likely to report that the cost of college did not influence their choice, that tuition is not a good investment, or that they expect to take additional time to complete their degree. Opportunities for practitioners to help clients navigate higher education investment decisions and opportunities for future research are discussed.