A growing number of employers no longer ask for a college degree. AI is automating the very entry-level jobs that once trained new graduates. And yet, parents still insist that a four-year degree is “the dream”—the clearest path to upward mobility and higher pay.
So how did the degree become the default? And, more importantly, should it stay that way?
From Luxury to Default
It’s easy to forget that the four-year degree hasn’t always been the baseline credential. In 1940, just 4.6% of American adults held a bachelor’s degree. It was the post–World War II GI Bill that unlocked access, putting millions of veterans into classrooms and turbocharging higher education’s growth. By the 1970s, the degree had become seen as the passport to the middle class.
This promise has been contested along the way. In 1967, then California governor, Ronald Reagan questioned whether the state could afford certain “intellectual luxuries” in higher education. That tension between higher education as a public good and as a personal investment has never really gone away.
Today, with $1.6 trillion in outstanding student debt and 38 million Americans holding “some college, no credential”, the cracks are widening.
The Two Goals of Education
In 1948, Dr. Martin Luther King Jr. reflected on education’s purpose in The Maroon Tiger: “The function of education… is utility and culture. Education must enable a man to become more efficient, to achieve with increasing facility the legitimate goals of his life.”
Seventy-five years later, we are still wrestling with that duality. The utility case for degrees has weakened for too many graduates: Pew data shows that more than half are underemployed, stuck in jobs that don’t require the credential they worked so hard (and paid so much) to obtain. Certain majors yield median salaries of just $40,000 five years out. Meanwhile, the cultural case—the ability of education to shape character, creativity, and citizenship—is harder to quantify in a metrics-driven labor market.
Enter the Skills-First Economy
Employers are shifting their gaze. Some large employers, like IBM and Hilton have dropped degree requirements in favor of skills-first hiring. A recent Forbes study found that 96% of employers say microcredentials strengthen an application—and many are willing to pay more for candidates who hold them. The World Economic Forum projects that nearly 40% of core job skills will change by 2030, with both technical fluency and human-centered abilities in demand.
At the same time, AI is rewriting the rules. A Burning Glass Institute report describes an “expertise upheaval” as AI automates the junior tasks that once served as proving grounds for new graduates. For the first time in modern history, a bachelor’s degree is no longer a reliable path to professional employment.
The Nuance—and the Opportunity
None of this means the degree is obsolete. Women with degrees continue to thrive at work compared to their non-degreed peers. Parents, across the political spectrum, still see college as the ticket to long-term earning power. Degrees still deliver lifetime value.
But the one-size-fits-all model is broken. For some learners, a bachelor’s degree is the right answer. For others, it’s trade education, apprenticeships, or short-cycle credentials that lead directly to work. The task for higher ed isn’t to defend the degree as the only path forward—it’s to expand the menu of options, clarify the value proposition, and connect learners to outcomes they can trust.
A Call to Action for Higher Ed Leaders
For administrators and marketers, this is not just an enrollment challenge. It’s a systemic one. Institutions that survive and thrive will:
- Articulate ROI with clarity—pairing cultural value with transparent career outcomes.
- Embrace stackable and portable credentials, meeting learners where they are and allowing them to build over time.
- Forge partnerships with employers, ensuring programs align with market demand and building direct pathways to jobs.
- Position the degree as part of a continuum, not a terminal product—integrating it into a lifelong learning ecosystem.
The degree is not dead. But its dominance is over. In an AI-driven, skills-first economy, higher education must reinvent itself—not as the gatekeeper of opportunity, but as the architect of multiple, flexible, and equitable pathways.