The Surprisingly High Value of a College Degree

The Surprisingly High Value of a College Degree

There’s little question that a four-year degree is a status symbol. It can feel pretty cool to add “B.A.” or “B.S.” to your résumé and strut down the street all cozy in your college sweatshirt.

But in terms of dollars and cents, what does that college diploma really get you? According to the Federal Reserve Bank of New York, pretty much.


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Based on the Fed’s recent analysis, college grads will earn $272,692 more over the course of their lifetimes than those with only a high school diploma. That’s more than double the value of a college degree in the 1970s ($120,000). So wear that university wardrobe with pride!

But here's the catch: While a college degree still pays off, its value has dropped 11% since 2007. In fact, while wages for high school grads have fallen by about 8% since 2000, salaries for college grads have dropped 10%. Meanwhile, nearly half of recent college grads are underemployed, meaning they’re working at gigs that don’t necessarily require that much education.

That said, there’s still a big wage gap between those with a high school and college diploma. While a four-year college grad can expect to earn about $64,500 on average, high school grads will make just $41,000.

Your post-grad salary also has a lot to do with what you choose to study. In June, the Fed revealed which majors provide the biggest return on investment. On average, college grads see a 15% ROI. For engineers, that number shoots up to 21%; for education majors, it drops to 9%.

While all this data seems to suggest that a college degree is generally worth the cost, the Fed reminds us that it’s possible college students are a self-selecting crowd. In other words, even if those four-year grads had never attended college, they still might have ended up earning more than high school grads because of skills they already possessed.

Convinced that college is the right choice for you or your kid? Learn how real families are paying for their education—and how you can make even smarter decisions.


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