Is a university education really worth the investment and expense?
Ultimately, whether college is worth the cost will depend on factors like your career and life goals and whether you'll need to take out student loans. While a college degree is still associated with greater earnings and wealth over a lifetime, the upfront cost is not worth it for many students.
College graduates fare better during recessions
College graduates not only earn higher wages and have higher-quality jobs, but they are also better protected during economic downturns. In the past several recessions, less-educated workers have borne the brunt of employment losses.
Thus, while the benefits of college still outweigh the costs on average, not all college degrees are an equally good investment. The economic benefits of a college degree can be thought of as the extra wages one can earn with a college degree relative to what one would earn without one.
With careful planning, student debt is worth it
But the data clearly show that incurring a carefully calculated amount of student debt to earn a marketable degree and enter a well-compensated, in-demand profession is very likely to pay off. In the end, it's a personal choice.
Same in this scenario, if the family is doing the expense for their kid's tuition, then this expense will be classified as the consumer expenditure for the services in the country's GDP.
ROI (Adjusting for Completion and Underlying Spending): The amount that a student can expect to see his or her earnings increase thanks to the college degree, subtracting the full underlying cost of college before subsidies, and accounting for the risk that the student will drop out before finishing the degree.
Ideally, an ROI greater than 100 should be achieved within ten years, although it can take longer. Let's say your son would like to be a public school teacher. He attends a four-year state school with an average annual tuition of $27,000.
In 2023, 55% of companies removed bachelor's degree requirements for some roles. 70% removed it for entry-level roles, 61% for mid-level roles, and 45% for senior-level roles.
Quick summary. Bachelor's degree graduates in the U.S. earn around 40% more than high school graduates. Colleges are a great space for networking with experts across many fields. Colleges tend to me more expensive and more rigorous than high schools, which can be stressful.
Higher Earning Potential
In fact, the median salary for someone with a bachelor's degree is more than twice as high as for someone with only a high school diploma or GED. It is also 45% higher compared to those with an associate degree.
Are most people in debt after college?
Many students borrow to fund a portion of their college expenses. Each year, 30 to 40 percent of all undergraduate students take federal student loans; 70 percent of students who receive a bachelor's degree have education debt by the time they graduate.
The benefits of free college include greater educational access for underserved students, a healthier economy, and reduced loan debt. Drawbacks include higher taxes, possible overcrowding, and the threat of quality reduction.
Average student loan debt in America
51% of 2021-22 bachelor's degree recipients graduated with an average of $29,400 in student loan debt. Among all borrowers, the average student loan debt in 2023 was $38,290. 53% of federal student loan borrowers owe $20,000 or less.
If you are like most people, your career is going to be your primary income source for most of your life. A college degree does increase income and lower the chances of unemployment—both valuable factors to consider when weighing a college degree against a market investment.
Taxes would have to increase significantly in order for the ability to be able to send every high school graduate to college. If no one is paying tuition and every school is reliant on taxes the schools would have no money to pay the electricity bill, the heating, teacher salaries, dorm necessities, and etc.
Free college education may have a large short-run cost, but it will provide significant benefits in the long run. Policies that increase college attainment can pay for themselves because college graduates have been proven to earn higher wages, and, therefore, have the capacity to pay higher taxes (Deming, 2019).
As with any investment, investing in a four-year college degree is risky. And many of the available estimates rely on best-case scenarios, assuming, for instance, that an entering student actually earns a degree.
A recent study published in the American Educational Research Journal found that engineering and computer science majors provide the highest returns in lifetime earnings, followed by business, health, and math and science majors.
According to a report by the Institute for Higher Education Policy, 83% of schools — serving 93% of undergraduates — provide an ROI within 10 years. That means that within 10 years, students recoup what they would be making with a high school diploma plus the cost of their college degree.
7 Great Reasons To Go Back to School At 40
Changing careers or working in a new industry. Increasing job security and improving upward mobility. Learning new technologies and tools to help future-proof your skill set. Advancing to management or leadership roles that require a degree.
Is a bachelors degree a good investment?
Studies have shown that individuals with bachelor's degrees earn significantly more than those without degrees. According to the Bureau of Labor Statistics, on average, individuals with a bachelor's degree make $524 more per week (that's over $26,000 a year!) than those with only a high school diploma.
So, will college degrees be a thing in 10 years? It's not a matter of extinction but adaptation. The traditional four-year degree may no longer be the default path to success, but higher education will continue to evolve.
The percentage of adults in the U. S. between the ages of 25 to 64 with college degrees, certificates or industry-recognized certifications has increased from 38.1% in 2009 to 54.3% in 2021, a gain of more than 16 percentage points.
It suggests that the number of graduates in jobs that don't make use of their skills or credentials—52%—is greater than previously thought, and underscores the lasting importance of that first job after graduation.
- Con 1. College is not a guarantee of a job or better life. ...
- Con 2. Student loan debt is crippling for college graduates, their families, and society. ...
- Con 3. Many people would be better served learning a trade or pursuing work right out of high school.
