As high school graduates move on from their alma maters, some will soon be heading off to a university, or planning to attend a community college closer to home. For others, college just might not seem within financial or academic reach. Talk about college—about how to pay for it, whether one can afford it—often centers on the question of whether it’s worth it, financially, in the long run. (The answer is yes, by the way—but it matters what you choose to study!)
The value of a college education is more than a means to a good-paying job. But intangible benefits aside, recent data show that the monetary value of a four-year degree, as measured by average lifetime earnings of college graduates, has never been higher. This is important to consider because the serious matter of mounting student loan debt—which in the United States has topped the $1 trillion mark (a topic covered here)—can be misleading. The average amount of debt that a student who borrowed for college owes upon graduation from a four-year institution is $25,000. That may seem like a lot, but it is a small fraction of the economic benefits that will accrue over a lifetime to a typical college graduate.
According to Department of Labor statistics for 2013, average hourly earnings for Americans with four-year degrees were 98 percent higher than for those without a degree. This figure has risen steadily for the last 30 years. And the most recent gains occurred even as the number of college graduates also has risen—and despite the Great Recession. Meanwhile, the wages of those who attended some college but did not get a four-year degree have not increased.
Given the price-tag of a higher education, families must squarely face the cost. But what about the cost of not going? According to an economist at MIT, the net cost of going to college is about negative $500,000. In other words, it is “cheaper than free.”
Image credit: © iStock Photo
- Is College Worth It? Clearly, New Data Say
This article updates the argument that, over a lifetime, for most people a college education is well worth the price.
(Source: New York Times, May 27, 2014)
- 6 Key Findings about Going to College
This report strongly endorses the value of a college education, with findings in such areas as earnings, economic independence, and job satisfaction.
(Source: Pew Research Center, February 11, 2014)
- Is College Worth It?
This article answers with a nuanced Yes, while providing much food for thought.
(Source: The Economist, April 5, 2014)
- 2013 College Education ROI Rankings: Does a Degree Always Pay Off?
This website ranks more than 1,000 universities to determine the financial return on investment (ROI), given tuition costs and median expected lifetime earnings associated with the schools; includes detailed rankings and comparisons by region, by school type (e.g., engineering, Ivy League, business, state, liberal arts), and by major, and includes a slideshow on ROI by gender.
(Source: PayScale; accessed May 31, 2014)