Yes, That College Degree Is Totally Worth It

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value-of-college-diplomaWhen it comes to higher education, there are few topics more controversial than whether a college diploma has any concrete value.

But according to a new analysis from the Economic Policy Institute, a four-year college degree has never been more rewarding.

Last year, the pay gap between college graduates and those without degrees stretched wider than ever before. In the U.S., graduates of four-year colleges made an average of about 98% more than everyone else, up from 89% in 2008.

These findings come on the heels of other research suggesting that, among people from similar backgrounds, those who attend college have a significant economic advantage over those who don’t.

One study, published this week, found that the cost of a college degree is actually negative $500,000. (To get that number, the study’s author subtracted the cost of tuition and fees from the difference between the average wages of college and high school graduates, and then adjusted for the cost of inflation and the time-value of money.)

But wait—haven’t salaries for college graduates basically stagnated over the last decade? While it’s true that average hourly wages for college grads have increased just 1% in the last 10 years to about $32.60, the average wage for non-college grads has gone down 5%, to about $16.50, The New York Times reports.

At the same time, the proportion of grads who believe college was worth their time and money has decreased significantly. Only 62% of Millennials say their degree has “paid off,” compared to 84% of Gen Xers and 89% of Boomers—which probably has something to do with the fact that the class of 2014 is the most burdened by student debt in history.

If this new research is enough to persuade you that higher education is worth the expense for you or your kid, start preparing now with our guide to saving for college.

  • http://oureverydaymoney.wordpress.com/ Todd R Christensen

    YES! I agree. So much so that this should not even be in question.

    Unfortunately, too many media outlets (traditional and social) sensationalize the cost of a college degree without highlighting the all-but-given advantages.

    I DO discuss what potential college students SHOULD be questioning before heading off to school in the newest OurEverydayMoney blog at http://wp.me/p3Bqpj-kM. These include their expected lifestyle while in college and their expected earnings after graduation. As a graduate with a foreign language degree (which I love and probably would not have changed anyway), understanding the value of different majors should also be part of any post-high school education discussion.

    Thanks for the post!

  • http://angelajford.com/blog Angela Ford

    A college degree is worth it! I would not be where I am today in my career without it – getting a degree is one of those things I will never regret. However I believe it is important for students to know what career they’d like to go into before going to college. Starting college at 17 or 18 is rough because you’ll learn so much about yourself and what you ideally thought your career should be can change.

  • 35yearoldGrad

    As a 35 year old finishing my first Bachelors in Finance…it has literally taken me this long to figure out the best degree to get with an understanding of the job opportunities that this degree could afford me. I’m confident that it will payoff. On the other hand, right out of high school I had no such idea and it just felt like a lot of work and getting hired without any work experience is near impossible for recent grads so I can see why they might be a little pessimistic.