Is College a Scam? What the Data Actually Says

“College is a scam” is one of the most searched opinions about higher education, and the people saying it are not stupid. They are looking at tuition bills, at friends with degrees working retail, and at loan balances that have not moved in five years.

The problem is that the argument mixes together things that are true, things that used to be true, and things that were never true. This page separates them, using figures from the National Center for Education Statistics, the Federal Reserve Bank of New York and Pew Research rather than vibes.

What People Actually Mean by “College Is a Scam”

Almost nobody means fraud in the legal sense. Accredited colleges deliver what they advertise: instruction, credits and a credential. When people say “scam” they usually mean one of four narrower things:

• The price is out of line with the value. A real question, and the answer depends enormously on which college and which major.
• The promise was oversold. “Get a degree and you will get a good job” was stated far more confidently than the evidence ever supported.
• The debt is structured badly. Eighteen-year-olds sign for five-figure loans before they can evaluate the return.
• Some institutions really do prey on students. This one is not a metaphor — it is a specific, identifiable subset, and it is covered further down.

Those are four different claims with four different answers. Lumping them into one word is what makes the debate go in circles.

What College Actually Costs

Here is the finding that surprises almost everyone, including people who work in education. According to NCES, measured in constant dollars, published tuition and fees at four-year public colleges were lower in 2022–23 than they were a decade earlier, and were at their lowest point of that whole period.

Read that carefully, because it does not say college got cheap. It says the sticker price at the institutions most students attend has not been running away in real terms. Where the sticker price did rise is private nonprofit colleges, which enroll a minority of students but generate most of the alarming headlines.

Tuition is not the whole bill, though. Total cost of attendance — tuition, fees, books, housing and food — for a first-time full-time student living on campus at a four-year institution in 2022–23 was:

• $27,100 at public institutions
• $33,600 at private for-profit institutions
• $58,600 at private nonprofit institutions

Housing and food, in other words, can cost more than the teaching. That reframes the “is it worth it” question: a large share of what students borrow is the cost of living somewhere for four years, which they would partly have paid anyway.

Sticker price is not the price most people pay

The single biggest distortion in this whole debate is quoting sticker prices. Princeton lists tuition of $65,210 for 2025–26 — a number that reliably goes viral. On the same page, Princeton states that the average net cost of tuition, fees, housing and food for a student receiving aid is $6,680.

That is not a trick, and it is not unique to Princeton. Wealthy private colleges discount heavily; many students at the most expensive-looking institutions pay less than they would at a mid-tier public one. Never evaluate a college on its sticker price. Every US college is required to publish a net price calculator, and it takes about ten minutes.

What Graduates Actually Earn

This is where the scam argument most often gets the facts backwards, so it is worth stating plainly.

A claim you will see repeated — and which an earlier version of this page repeated — is that recent graduates now earn less than graduates did decades ago. Pew Research’s analysis says close to the opposite. Earnings for young men with a bachelor’s degree have trended up over the past decade. The group whose earnings remain below where they were in the early 1970s is young men without a four-year degree — those with a high school diploma or some college.

The gap between graduates and non-graduates did not close. In large part it widened, because the floor fell out from under the group without degrees. That is a real and painful economic story, but it is an argument for the degree’s relative value, not against it.

The Federal Reserve Bank of New York, which tracks this continuously, titles its own summary of the research plainly: Despite Rising Costs, College Is Still a Good Investment.

The Parts of the Argument That Are Real

None of the above means the complaint is baseless. Three parts of it hold up under scrutiny.

1. Underemployment is high, and that is the strongest point

As of the second quarter of 2026, the New York Fed put the unemployment rate for recent college graduates at about 5.6% and the underemployment rate at 42% — that is, roughly four in ten recent graduates were working in jobs that do not typically require a degree.

That number is the honest core of the scam argument. If you were told a degree guarantees graduate-level work, the data says it does not, and has not for a long time. The Fed describes conditions for recent graduates as “challenging.” Anyone telling a seventeen-year-old that a degree is an automatic ticket is misinforming them.

2. Not finishing is the real financial disaster

The worst outcome in higher education is not an expensive degree. It is debt with no degree — you carry the loan and receive none of the earnings premium. Discussions of “average student debt” usually blur graduates and non-completers together, which flatters the numbers for one group and hides a catastrophe for the other.

If there is one risk to weigh above all others before enrolling, it is the honest probability that you will finish.

3. Some institutions genuinely do exploit students

This is the part where “scam” stops being a metaphor. Unaccredited providers and diploma mills sell credentials that employers do not recognize. Some institutions have recruited aggressively into programmes with poor completion and repayment records.

The defence is unglamorous and effective: check accreditation before anything else, and treat any recruiter creating urgency about a deadline as a warning sign. A legitimate college will still be there next week.

Why It Feels Like a Scam Even Where the Data Disagrees

Pew captured the paradox directly. Its 2024 report is subtitled with the observation that economic outcomes for young adults both with and without degrees have improved, while Americans’ views on the value of college have grown more skeptical. Only about one in four US adults said it is extremely or very important to have a four-year degree to get a well-paying job; 40% said it is not too or not at all important.

Sentiment and outcomes are moving in opposite directions. A few things explain most of that gap:

• The cost is paid up front and visibly; the return arrives slowly and invisibly. You feel a loan payment every month. You never see the raise you got because you had the degree.
• Averages hide enormous spread. “College graduates earn more” is true on average and wrong for plenty of individuals. Major, institution and completion matter more than the word “degree.”
• The comparison group changed. A degree used to be a way to stand out. Now it is often a filter to get considered at all — the same credential buys less distinction while being harder to go without.
• Sticker prices dominate the conversation. The $65,000 number travels; the $6,680 net cost does not.

When College Genuinely Is Not Worth It

A page that only defended college would be as useless as one that only attacked it. There are situations where the honest answer is no, or not yet:

• You would borrow heavily for an unaccredited or poorly-regarded provider. The credential has to be recognized by the people who hire.
• Your target occupation is licensed through another route. Many skilled trades, and a number of technical roles, are entered through apprenticeship or certification. Paying for a degree you will not use is a bad trade.
• You are enrolling because it is expected, not because you want to be there. This is the strongest predictor of the worst outcome, dropping out with debt. A gap year costs vastly less than an abandoned year of tuition.
• You are already established in a field that does not check. If you are earning and progressing without one, the degree has to justify itself against real forgone income.

Notice that none of these are “college is a scam.” They are all “this particular degree, at this price, for this person, is a bad deal” — which is a question you can actually answer.

How to Make Sure It Is Not a Scam for You

If you do go, most of the downside is avoidable and the levers are boringly practical:

• Run the net price calculator before you rule anything in or out. Every US college publishes one. Sticker price tells you almost nothing.
• Check accreditation first, every time. It is the difference between a credential and a receipt.
• Treat in-state public as the default and make anything pricier justify the difference. At $9,800 average tuition, that is the benchmark the alternatives have to beat.
• Take the major seriously as a financial decision. The spread between fields is wider than the spread between institutions. The New York Fed publishes outcomes by major.
• Optimise for finishing. A cheaper college you complete beats a prestigious one you do not.
• Borrow against a number, not a feeling. Look up realistic starting salaries for your field before signing, not after.

So — Is College a Scam?

No. On the measures that can be checked, a degree still pays: graduates earn more, are employed more, and are less likely to be in poverty, and the institution most students attend has not raised real tuition in a decade.

But the version of the promise many people were sold — that any degree reliably produces graduate-level work — is not supported by a 42% underemployment rate, and never really was. The gap between that promise and the evidence is what “scam” is pointing at, and pretending it does not exist is why the argument keeps winning converts.

The useful question is not whether college is a scam. It is whether this college, at this net price, for this course of study, is a good deal for you — and unlike the general question, that one has an answer you can work out in an afternoon.

Frequently Asked Questions

Is college a scam?

No. Graduates still earn more and are employed at higher rates than non-graduates, and in constant dollars, published tuition at four-year public colleges was lower in 2022–23 than a decade earlier. What is real is a 42% underemployment rate among recent graduates and the risk of taking on debt without finishing.

Is college a pyramid scheme?

No. A pyramid scheme pays existing participants out of money from new recruits and collapses when recruitment stops. Colleges sell instruction and a credential, and their finances do not depend on graduates enrolling further students. You can criticise college pricing without the analogy, which does not fit.

Has college tuition really skyrocketed?

It depends which college. In constant dollars, NCES reports four-year public tuition and fees at $9,800 in 2022–23, 5% lower than in 2012–13, and private for-profit down 14%. Private nonprofit colleges rose 8%. The alarming headline numbers usually come from sticker prices at private nonprofits, which most students do not attend and few pay in full.

Do college graduates earn less than they used to?

No — that claim is commonly stated backwards. Pew Research finds earnings for young men with a bachelor’s degree have trended up over the past decade. It is young men without a four-year degree whose earnings remain below where they were in the early 1970s.

What is the underemployment rate for recent graduates?

The Federal Reserve Bank of New York put it at about 42% in the second quarter of 2026, with unemployment for recent graduates at roughly 5.6%. Underemployment means working in a job that does not typically require a degree. It is the strongest single data point in the case against college.

Is a college degree outdated?

Not outdated, but it does a different job than it used to. It is less a way to stand out and more a filter for being considered at all, which means it buys less distinction while being harder to go without. Employers increasingly screen for demonstrable skills alongside the credential.

What is the worst financial outcome in higher education?

Taking on debt and not finishing. You carry the loan without receiving the earnings premium that justifies it. If you weigh one risk above all others before enrolling, weigh the honest probability that you will complete the course.

Sources

• NCES — Tuition costs of colleges and universities (tuition and total cost of attendance, constant 2022–23 dollars)
• Federal Reserve Bank of New York — The Labor Market for Recent College Graduates (2026:Q2 unemployment and underemployment)
• Pew Research Center — Is College Worth It? (earnings trends and public attitudes)
• Princeton University — Cost & Aid (sticker price vs. average net cost)