10 Apr College Value vs. College Cost: What’s the Value of College?
Given the expense and effort invested in a college education, it’s natural to ask about the importance of college. Across factors including financial considerations to personal fulfillment, most Americans believe college is worth the effort.
What’s the importance of attending college? A college education has replaced a high school diploma as the gateway to the middle class, according to an extensive public opinion survey completed by the non-profit group Public Agenda in 2000.
Even most young people who leave college before completing a degree acknowledge the importance of college. Of those who failed to complete a degree, 89 percent said they had thought about returning to college, and 97 percent said it would be important for their own children attend college.
The Importance of College to Financial Success
And if money does indeed talk, the importance of college is enormous. Consider the following average annual incomes compiled by the U.S. Census Bureau:
- High school dropouts: $18,900
- High school graduates: $25,900
- College graduates: $45,400
- Professional degree recipients: $99,300
Why is a college degree so beneficial to a person’s earnings power?
- More and better career choices. College graduates generally have more transferable skills, meaning they can perform a number of positions across different industries and companies. That means they’re more valuable to employers, who are then forced to pay more to attract and retain them.
- Technological skills. College students today are exposed to technology that’s driving the economy, making the importance of college an even bigger factor in employment. And because they’ve learned how to learn, they are better able to adapt to new technology and workplace changes.
In today’ competitive job market, the importance of college can’t be overestimated. A college degree offers many workplace advantages, from increasing an employee’s chances of being promoted to making it easier and more likely that he or she is able to transition to a new job, industry or even an entirely new career.
After hearing stories about unemployed college graduates with six-figure student debt loads, Americans may be skeptical about college value and wary about college costs. Recent research shows college remains one of the best investments you can make.
- More money over a lifetime. Full-time college students generally forego a living wage while studying, but after graduation, they more than make up for that income shortfall by earning more over their lifetimes than those with only a high school diploma. Also something to consider in the college-value-to-college-cost equation: those who earn degrees in science- or math-related fields generally earn more as soon as they graduate than students in other majors, according to studies cited by The Wall Street Journal.
- Non-monetary value. According to studies cited by U.S. News & World Report, “College graduates are healthier, contribute more to their communities, and raise kids who are better prepared academically.”
- Living an inquisitive, well-rounded life. Value can be intrinsic, and it often is with a college degree. College introduces students to new ideas and can awaken interests and aptitudes people didn’t previously know they had.
- Zeroing in on work you enjoy. Especially at colleges that offer a wide range of programs and the flexibility to study across disciplines, higher education can help those unsure about a new career path decide upon the best one for them.
- Technological literacy. Especially for older adult learners, the speed with which technology has changed the workplace can be daunting. In most college programs, students are required to learn to effectively work with technology, experience that can serve them well post-graduation.
- A bootstrap out of poverty. College is a particularly good value for students from low-income families because receiving an education is the best chance of helping them break out of low-paying jobs.
College value versus college cost is often difficult to quantify: how do you place a value on learning? “Higher education is an investment in human capital,” former Gettysburg College President Katherine Haley Will told National Public Radio. College value outweighs “any simple calculation of costs.”
Conventional wisdom is that college is worth the money because it provides a path to considerably higher earnings than usually can be earned with a high school diploma alone. But is that true?
If you are considering attending college, you likely are at least partially drawn in by the prospect of earning more money when you graduate. The College Board, a not-for-profit association, has long contended that college degrees are worth the money because they pay off over high school diplomas to the tune of $800,000 more in pay over the course of a 40-year career.
However, in recent years increasing tuition costs and a difficult job market have called those figures into question. In an interview with Forbes magazine, Mark Schneider, of the American Institutes for Research, called the calculation “a million-dollar misunderstanding.”
Reduced Earnings Still Higher for College Grads
Taking into account the increasing cost of college, student loan debt, and breaks in employment, Schneider estimated that college graduates earn about $280,000 more than high-school graduates. A researcher commissioned by The College Board in 2007 put the figure at about $450,000.
Most researchers agree that college is worth the money, because graduates, on average, do earn more than their counterparts with only high-school diplomas.
One way to make sure that college pays off for you is to take advantage of grants and scholarships when applying. Carefully read the terms of any student loans you apply for to make sure the terms are favorable. And research average salaries in your desired field so you can decide how much debt, if any, you are comfortable taking on.
College offers more than just a path to a higher salary–it offers a change to learn and grow. A carefully thought out financial plan can help you achieve that.