Is College Education Worth It? Is College Worth the Cost of Education? Why a College Education Still Matters

The American debate over whether a college education is worth it began when the colonists arrived from Europe and founded "New College" (later renamed Harvard University) in 1636. With 20.4 million US college students in fall 2017, and over $1.5 trillion in total student debt as of May 2018, the debate continues today. 

Is a degree still worth the time and money necessary? Do employers value a college education as much as they once did? Read on to see if a university degree is a smart investment for you.

With average student loan debt reaching an all-time high, it begs the question, is college worth it? Although a crucial factor, a lot more goes into that question than just debt. It is equally important to consider things like lifetime earnings, benefits, ROI, unemployment rates, and quality of life.  Today we speak about questions: How necessary is a college education? Is a college education worth it? And review all pros and cons of college education.

Is Going to College Worth It?

It's a valid question - but in short, the answer is yes. You might look at the list above and think that there's no way that spending all of that money on a college education will be worth it. However, while the cost of college is admittedly high, there is still enormous benefit to obtaining a four-year degree. Here are the top reasons why college is worth it.

People who argue that college is worth it contend that college graduates have higher employment rates, bigger salaries, and more work benefits than high school graduates. They say college graduates also have better interpersonal skills, live longer, have healthier children, and have proven their ability to achieve a major milestone. 

People who argue that college is not worth it contend that the debt from college loans is too high and delays graduates from saving for retirement, buying a house, or getting married. They say many successful people never graduated from college and that many jobs, especially trades jobs, do not require college degrees.

  1. 20.4 million students were enrolled in colleges and universities in 2017, compared to 13.5 million in 1990, 7.9 million in 1970, and 2.7 million in 1949 
  2. In 2011, 50% of US college graduates under 25 years old had no job or only a part-time job. 
  3. One in three college graduates had a job that only required a high school diploma or less in 2012, including more than 16,000 parking lot attendants, 83,000 bartenders, and 115,000 janitors with bachelor's degrees. 
  4. In Aug. 2013, approximately 6,900 accredited colleges and universities were operating in the United States, compared to 3,535 in 1990 and 1,851 in 1950. 
  5. In Apr. 2013 the unemployment rate for college graduates over 25 years old was 3.6% compared to 7.5% for high school graduates. 

Arguments that college is worth it

1. College graduates make more money

The average college graduate makes $570,000 more than the average high school graduate over a lifetime. Career earnings for college graduates are 71% to 136% higher than those of high school graduates.  In 2016, the average income for people 25 years old and older with a high school diploma was $35,615, while the income for those with a bachelor's degree was $65,482, and $92,525 for those with advanced degrees. The median income for families headed by a bachelor's degree holder was $100,096 in 2011—more than double than that for a family headed by a high school graduate.  The median increase in earnings for completing the freshman year of college was 11% and the senior year was 16% in 2007.  85% of Forbes' 2012 America's 400 Richest People list were college grads. 

2. More and more jobs require college degrees

Only 34% of American jobs require a high school diploma or less in 2017, compared to 72% in the 1970s.  During the recession between Dec. 2007 and Jan. 2010, jobs requiring college degrees grew by 187,000, while jobs requiring some college or an associate's degree fell by 1.75 million and jobs requiring a high school degree or less fell by 5.6 million.  According to a June 2016 study, 99% of job growth (or 11.5 million of 11.6 million jobs) between 2010 and 2016 went to workers with associate's degrees, bachelor's degrees or graduate degrees.  Based on economy and job projections calculated by Georgetown University, in 2018, approximately 63% of jobs will require some college education or a degree. 

3. College graduates have more and better employment opportunities

85.2% of college freshman in 2015 said they attended college to "be able to get a better job."  In Jan. 2017, the unemployment rate for college graduates aged 25 and over with a bachelor's degree was 2.5%, compared to 3.8% for those with some college or associate's degrees, 5.3% for high school graduates, and 7.7% for high school drop-outs. In 2015, 6.2% of college graduates were underemployed (insufficient work), compared to 12.9% of high school-only graduates and 18.7% of people without a high school diploma. College graduates are more likely to receive on-the-job formal (22.9%) or informal (17.2%) training, more access to technology, greater autonomy, and ability to enhance skills compared to high school graduates.  58% of college graduates and people with some college or associate's degrees reported being "very satisfied" with their jobs compared to 50% of high school graduates and 40% of people without a high school diploma. 

4. College graduates are more likely to have health insurance and retirement plans

70% of college graduates had access to employer-provided health insurance compared to 50% of high school graduates in 2008. 70% of college graduates 25 years old and older had access to retirement plans in 2008 compared to 65% of associate's degree holders, 55% of high school graduates, and 30% of people who did not complete high school. 

5. Young adults learn interpersonal skills in college

Students have the opportunity to interact with other students and faculty, to join student organizations and clubs, and to take part in discussions and debates. According to Arthur Chickering's "Seven Vectors" student development theory, "developing mature interpersonal relationships" is one of the seven stages students progress through as they attend college.  Students ranked "interpersonal skills" as the most important skill used in their daily lives in a 1994 survey of 11,000 college students.  Vivek Wadhwa, MBA, technology entrepreneur and scholar, states, "American children party [in college]. But you know something, by partying, they learn social skills. They learn how to interact with each other…They develop skills which make them innovative. Americans are the most innovative people in the world because of the education system." 

6. College graduates are healthier and live longer. 

83% of college graduates reported being in excellent health, while 73% of high school graduates reported the same. A 2018 University of Southern California study found that adults over 65 with college degrees spent more years with "good cognition" and fewer years suffering from dementia than adults who did not complete high school.  In 2008, 20% of all adults were smokers, while 9% of college graduates were smokers.  63% of 25 to 34 year old college graduates reported exercising vigorously at least once a week compared to 37% of high school graduates.  College degrees were linked to lower blood pressure in a 30-year peer-reviewed study and lower levels of cortisol (the stress hormone) by a Carnegie Mellon Psychology department study.  In 2008, 23% of college graduates aged 35 to 44 years old were obese compared to 37% of high school graduates. College graduates, on average, live six years longer than high school graduates. 

7. College graduates have lower poverty rates

The 2008 poverty rate for bachelor's degree holders was 4%, compared to a 12% poverty rate for high school graduates.  In 2005, married couples with bachelor's degrees were least likely to be below the poverty line (1.8%) compared to 2.7% of associate's degree holders, 4.6% of couples with some college, and 7.1% of high school graduates. According to the US Census Bureau, 1% of college graduates participated in social support programs like Medicaid, National School Lunch Program, and food stamps compared to 8% of high school graduates in 2008. 

8. The children of college graduates are healthier and more prepared for school

A Lancet medical journal study from 1970 to 2009 showed college graduates had lower infant mortality rates than high school graduates.  Mothers with only a high school education are 31% more likely to give birth to a low-birth-weight baby than a woman with a college degree. Children aged 2 to 5 years old in households headed by college graduates have a 6% obesity rate compared to 14% for children in households headed by high school graduates. 18% more children aged 3 to 5 years old with mothers who have a bachelor's degree could recognize all letters compared to children of high school graduates.  In 2010, 59% of children in elementary and middle school with at least one college graduate for a parent participated in after-school activities like sports, arts, and scouting compared 27% for high school graduate parents. 

9. College graduates are more productive as members of society

Henry Bienan, PhD, President Emeritus of Northwestern University, argues that a college education results in "greater productivity, lower crime, better health, [and] better citizenship for more educated people."  A 2009 study found 16 to 24 year old high school drop-outs were 63% more likely to be incarcerated than those with a bachelor's degree or higher.  According to the Bureau of Labor Statistics, from Sep. 2008 to Sep. 2009, 43% of college graduates did volunteer work compared to 19% of high school graduates and 27% of adults in general.  In 2005, college graduates were more like to have donated blood in the past year (9%) than people with some college (6%), high school graduates (4%), and people who did not complete high school (2%). 

10. College graduates attract higher-paying employers to their communities

A 1% increase in college graduates in a community increases the wages of workers without a high school diploma by 1.9% and the wages of high school graduates by 1.6%.

11. Learning is always worthwhile

According to Rebecca Mead, staff writer for The New Yorker, college teaches students "to nurture critical thought; to expose individuals to the signal accomplishments of humankind; to develop in them an ability not just to listen actively but to respond intelligently;" all of which "are habits of mind…from which a letter carrier, no less than a college professor, might derive a sense of self-worth." In 2011 74% of students said college helped them "grow intellectually" and 69% said college helped them grow and mature as people.  Jonathan D. Fitzgerald, MA, Visiting Professor at Eastern Nazarene College, argues, "The value of a liberal arts college education --to you, to employers-- is that you've spent four years in a place where you were forced to consider new ideas, to meet new people, to ask new questions, and to learn to think, to socialize, to imagine. If you graduate, you will get a degree, but if you are not a very different person from who are you are today, then college failed." 

12. College allows students to explore career options.

 Colleges offer career services, internships, job shadowing, job fairs, and volunteer opportunities in addition to a wide variety of courses that may provide a career direction. Over 80% of college students complete internships before graduation, giving them valuable employment experience before entering the job market. 

13. People who do not go to college are more likely to be unemployed and, therefore, place undue financial strain on society, making a college degree worth it to taxpayers

Young people "not engaged in employment/education or training," AKA NEET, are more likely to receive welfare than youth in general, they are more likely to commit crimes, and they are more likely to receive public health care, all costing the government extra money. In total, each NEET youth between the ages of 16 and 25 impose a $51,350 financial burden on society per year, and after the person is 25 he or she will impose a financial burden of $699,770.  The total cost of 6.7% of the US population being NEET youth is $4.75 trillion, which is comparable to half of the US public debt. 

14. Colleges provide networking value

Harvard Business School estimates that 65 to 85% of jobs are acquired through networking. College students can join fraternities and sororities, clubs, and teams as well as participate in a variety of social functions to meet new people and network with possible business connections. Internships offered through colleges often lead to mentors or useful contacts within a student's preferred field. Many colleges offer social media workshops, networking tips, career-related consultation, and alumni networks. 

15. College education has a high return as an investment

 Return on investment (ROI) is calculated by dividing the gain from an investment (here the money earned as a result of a college degree) by the cost of the investment (the money spent on a college degree). A college degree has a return of 15% per year as an investment, larger than the stock market (6.8%) and housing (0.4%). Completing some college, but not earning a degree, resulted in a 9.1% return on investment.  If a student spent $17,860 (the average cost of tuition and room and board in 2012-2013 for four years at a public university ), that student could expect a 15% return of $2,679 each year. According to a 2011 Pew Research survey, 86% of college graduates believed college was a good personal investment. 

16. College exposes students to diverse people and ideas

Students live, go to classes, and socialize with other students from around the world and learn from professors with a variety of expertise. The community of people on a college campus means students are likely to make diverse friends and business connections, and, potentially, find a spouse or mate. Access to a variety of people allows college students to learn about different cultures, religions, and personalities they may have not been exposed to in their home towns, which broadens their knowledge and perspective. 70.7% of college freshman in 2015 said they expected to socialize with someone of another racial or ethnic group while in college, while 59.1% said college would help improve their understanding of other countries and cultures.  In 2004, 79% of people with graduate degrees and 73% of college graduates thought it "very important to try to understand the reasoning behind the opinions of others" compared to 67% of associate degree holders, 64% of high school graduates, and 59% of high school drop-outs. 

17. Earning a college degree is a major life achievement

 College graduation can represent an attainment of the American Dream, the culmination of years of hard work for the student, and the payoff for sacrifices made by supporting parents and friends. Blogger Darrius Mind wrote that his graduation day at Wilberforce University was, "probably the best day of my entire life. That was the day I finished my challenge to myself and also the day I made history in my family, it was the day I EARNED my college degree." 

Why a College Education Still Matters

The Average Cost of Tuition
According to the College Board, the average cost of tuition and fees (fees may include the library, campus transportation, student government, and athletic facilities) for the 2016–2017 school year was $33,480 at private colleges, $9,650 for state residents at public colleges, and $24,930 for out-of-state residents attending public universities. 

These numbers do not include housing, meals, books or school supplies which could easily tack on another $10,000 to $16,000 a year. If you add room and board to yearly tuition and fee averages, a private nonprofit four-year college costs $45,370, while a public four-year costs $20,090. Now, multiply those numbers by four (four years of college), and you are looking at a really hefty college bill. It’s no wonder that the student debt crisis has toppled $1.3 trillion.

Footing the college bill can be a tough pill to swallow when you couple the costs with the fact that we may see graduates around us out of work. While I’m not recommending students pick up unnecessary student loan debt, I do think that there is enough evidence to encourage our children to go to college.

It's possible that your child may join the ranks of highly successful entrepreneurs that don’t have college degrees, but there is just a very small fraction of people who are going to become the next Bill Gates, Steve Jobs, or Richard Branson. These success stories are few and far between, and what these business leaders lacked in formal education they more than abundantly made up for in entrepreneurial skills, business savviness, drive, and passion.

The New Minimum Requirement for Employment

Burning Glass Technologies, a Boston-based labor analytics firm, found that employers are increasingly use the bachelor's degree credential as a rule of thumb for recruiting employees.

The firm’s report, "Moving the Goalposts: How Demand for a Bachelor’s Degree is Reshaping the Workforce,” said, “Credential inflation [requiring a post-high school degree] is affecting a wide range of jobs from executive assistants to construction supervisors.” Economists refer to this trend as "degree inflation," and it is becoming more common in America's job market.

Less Risk of Unemployment

The unemployment rate for individuals with a bachelor's degree is inversely proportional to their increased earnings. While college graduates have an unemployment rate of just 2.7%, this percentage nearly doubles for individuals with just a high school diploma or GED, who have an unemployment rate of 5.2%. As more and more people obtain bachelor's degrees, it will be increasingly important to be among these individuals for future job security.

Data Indicates That a College Degree Is Still Worth It  

According to the Bureau of Labor Statistics, the pay gap between those with a four-year degree and those with a high school degree is at a record high. Those with a four-year college degree earn a median weekly salary of $1,137, whereas employees with a high school degree average $678. The difference is even higher when comparing employees with doctoral degrees (the median weekly salary is $1,623) with those with some or no college degree (the median weekly salary is $738.) 

In fact, not only will college graduates make more money, but not going to college could cost you dearly to the tune of $1 million in lifetime wages. While you may wonder if these numbers apply to only graduates of Ivy League schools, the Economic Policy Institute numbers show that the benefits of college don’t just go to graduates of elite colleges, but to all college graduates with a four-year degree. Those with a high school degree face 17.9 percent unemployment versus 5.6 percent for college graduates.

And nearly one in seven high school graduates is stuck in a part-time job with entry-level wages, and very few options for full-time employment.

Increased Job Prospects

Today's employers are looking for highly-skilled, well-trained employees - and having a degree is one of the best ways to demonstrate that you possess the capabilities needed for success in today's business world. And, increasingly, a college degree is a barrier for entry to many businesses. A recent study found that employers are, across the board, raising the educational requirements for many positions - in fact, 38% of organizations have raised the educational requirements for hiring over the last five years, and 41% of employers are hiring individuals with college degrees for positions that used to be held primarily by those with high school diplomas.

Considering the Debt Load

Collectively, student borrowers owe more money than the total U.S. credit card debt. Their expenses on education far exceed that of impulse purchases, vacations, and everyday spending. An average 2016 graduate left school with $37,172 in debt. A medical student would graduate with over $190,000 in student loan debt. A number like this may make college seem like the wrong choice. Do not let it stop you.

Looking at the debt in terms of monthly payments rather than a large sum makes it seem more manageable. Use the Federal Student Aid repayment estimator to calculate monthly payments and the total accumulated interest. Keep in mind that the “average” tool on this page only represents the average federal loan amount. It does not include private loans. Research the potential earnings for your major to determine an average monthly income. Compare that to your loan payment.

Certain Degrees May Have Higher Returns Than Others 

Now that we've seen that a college degree is (more than) worth it, let's look at how the major you select can make a difference to your earnings down the road. A study released by Georgetown’s Center on Education and the Workforce reveals that the difference in lifetime wages for different majors is enormous. In fact, the difference between lifetime wages for the highest and lowest paying majors is $3.4 million!

The top paying majors unsurprisingly include STEM (science, technology, engineering, and mathematics), health and business. The majors with the lowest median earnings are in education, arts, and social work. Georgetown’s study is chock full of great information that includes tools that allow you to see the average income in various fields based on the degree obtained. I definitely recommend taking some time to check it out.   

Of course, it’s extremely important to note that our economy needs both teachers and engineers. We need social workers just as we need accountants. It’s easy to obsess over what major could make you the most money, but it’s more important to find something that you enjoy and where you could excel in the field.  

Have you wondered if a college degree is worth it? Before you decide that the price tag is too high, be sure to look at what the statistics show. If you are concerned about saving for college, check with a financial advisor to discuss a college savings strategy right for you. 

Return on Investment

Determining your return on investment will help you answer the question, is college worth it for yourself. Calculating ROI requires three numbers: the amount of money you spend on college, the number of years you want to pay it back in, and the average salary for your desired job. Use the ROI equation below:

ROI = [(Average Salary of Desired Job x Number of Years to Pay off Loans) – Cost of College]/ Cost of College

You can also check out an online list of college ROIs that considers major, school, and alumni salary data. Their research has found that STEM majors generally have a significantly higher ROI and yearly earnings, but softer majors like humanities and art can be competitive. For these majors, it all depends on where you study. Since this data looks at average salaries from a particular school’s alumni, it offers a more accurate depiction of your potential future earnings.

Choosing to study a subject with low return on investment can lead to crippling consequences. Missing or late loan payments affect your credit score. This can put your future purchases and financially stability at risk. It may delay things like home purchasing, retirement investing, and even marriage. Choosing a school with lower tuition will help combat the lower earnings of your major.

Factor in Long-Term Earning Potential

According to a paper published in the journal Science, while college is a significant investment, over the long run, college is “cheaper than free.” The study states that not going to college will cost you about $500,000 over your lifetime — after deducting tuition costs.

Another study by the Pew Research Center, titled “The Rising Cost of Not Going to College,” shows that the earning gap between those with and without a college degree is the widest it’s been in 50 years. The study also states that college graduates, regardless of generation, earn more than those without a degree.

Career Prospects and Unemployment

The knowledge college gives you is great, but will it translate to a job? Research shows that those who attend college have more job opportunities than ever before. As of 2017, only 34% of jobs require a high school diploma or less. The remaining 66% belong to those with at least an associate’s degree. In time, that percentage will only increase. Plus, from 2010-2016, 99% of job growth pertained to jobs requiring an associate’s degree and up.

Unemployment rate data for those age 25 and up further reflects the disparity:

Bachelor’s degree holders: 2.5%

Some college or associate’s degree: 3.8%

High school graduate, no college:  5.3%

No high school diploma: 7.7%

A big reason for the lower unemployment rate is the shortage of college graduates and the shortage of high school students prepared for college. Things like automation also contribute to the declining number of jobs for high school graduates.

Making an Investment in Your Future

Perhaps more than any other reason, the fact that by getting a degree you will be making a investment in your future makes the cost of college worth it. It can be difficult to look beyond where you are right now to make decisions that will benefit your future self, but when you really consider the benefits of a degree, the value of college education becomes evident. Despite the significant financial commitment you're making when you enroll in a degree program - not to mention the time, energy, and work required to reach completion - the payoff is more than worth it in the end. When you receive your diploma, you'll be greeted by not just the tangible benefits in terms of career and income, but a sense of having done the right thing to secure your future success as well.

Is a Degree Worth It?

Again - yes. A recent economic impact study revealed that on average, for every dollar invested in a CSU-Global degree, graduates see a return on investment of four dollars.

If you’re starting to see the value of a degree, contact us at CSU-Global for help choosing a major.

So, Is College Worth It?

The answer to that question highly depends on your situation. If you do not have to borrow money, the research points to the answer “yes.” Your lifetime earnings, benefits, and job satisfaction will far exceed your peers who only have a high school diploma. Plus, you can explore your passion and pursue a career you love without later financial consequences.

The question becomes more complicated for those taking out loans. If that is you, spend time pondering the information above. Debt plays a huge part, but do not let it cloud your judgment. Decide what you want your future career path and family life to look like and let that guide your answer to the question, is college worth it?.  If you decide to take the leap, make sure you have a plan on how to pay down your debt as soon as possible.