How much is a college degree really worth?
Filed under: Money College
That's what the College Board tried to figure out in a new report titled "Education Pays," which details the financial, career and even health benefits of earning a college degree. The College Board started this study in 2004, updated it in 2007 and again this year. Its final results, however, have remained the same: employees with a four-year college degree earn much more and are less likely to be unemployed than those with just a high school diploma. Median earnings for full-time workers with bachelor's degrees in 2008 were $55,700, compared to $33,800 for those without them.
The report's authors say that the results are even more dramatic than the findings in the 2007 report. Back then, there was a 2.3 percentage point difference in unemployment rates between college grads and high-school-only grads. Now, the 2009 unemployment rate for college graduates over age 25 is 4.6%, compared to 9.7% for high school grads, a 4.6 percentage point difference.
The pay premium has also grown in the past decade. In the 25 to 34 age bracket in 2000, women with college degrees earned 60% more than female high school grads. For men, it was 54%. Now, those income differences have dramatically increased -- 79% more for women college grads, and 74% more for men.
The report also says a college degree benefits one's health and well-being, too. Graduates are more likely to vote, volunteer and exercise, and less likely to smoke or become obese.
By age 33, after 11 years of work, a college degree leads to higher earnings, the report says. "The key point is that for the typical student, the investment pays off very well over the course of a lifetime -- even considering the expense," the authors write.
Of course, not everyone agrees with the report's findings.One thing to keep in mind is that it was issued by the College Board, a membership organization representing colleges, so it's not likely to tell people that college is a waste of time. In fact, when the last "Education Pays" report came out in 2007, Charles Miller, the then chairman of the federal Commission on the Future of Higher Education, publicly criticized the College Board, accusing it of acting like a cheerleader for higher education by inflating the financial payoff of a college degree and underestimating its cost.
Also, the report glosses over the fact that some high school grads earn as much, if not more, than some college grads. There is great variability in outcomes, as Robert Lerman, an economics professor at American University, told the New York Times. "All is not lost if you don't go to college. There are other routes to improving your earnings, for example, credentials that demonstrate mastery of an occupational skill like plumbing."
Still, the report's critics (all college grads), do agree that education does pay. Even Miller, who believes the new report is still over inflating the benefits of a degree, doesn't think people should just give up on college. Instead, he says, the report's results are evidence of how higher education's financial system is broken, and the cost of getting that degree is getting harder for more people to achieve. It's a given that the majority of Americans -- college and high school grads alike -- can agree on that point.
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Reader Comments (Page 1 of 1)
10-19-2010 @ 1:48PM
J said...
I started my own business with the hard-earned capital that would have gone to overpaid professors. I feel sorry for my friends with all their school debt. For those who have graduated within the last 5 years its not a great investment. i make less than some of them on paper, but when you account for their debts im easily accumulating wealth while theirs bleeds away to interest. Ive also got something priceless they dont: FREEDOM (& the nice paid-for car and paid-for vacations) they wish they could have. My poor friends are modern day slaves. College degree past about 2005? NOT WORTH IT!!!
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10-19-2010 @ 2:04PM
Tina said...
I am a single mother of one young child and I only have one income, which is only $21,000/year, Living in California! My credit is a real mess (due to being very irresponsible), but now I am making an effort to clean it up and make my life better. I have purchased almost EVERY program and have gone to just about every "free seminar" on making money online. Not only did these programs not work for me, I spent money that I truly did not have. I used all of my savings to get all these courses and found them to be extremely difficult to use and were not speaking my language. I wanted the make a better life for my child and me. Also, to leave him something when I'm gone. I was very excited to discovered this website: ( Http://tinyurl.com/HomeBusinessStart ) I wish I had known about this site five years ago I know it would have saved me a lot of capital.
10-19-2010 @ 2:23PM
qerxi said...
It's amazing that college tuition continues to go up while the average family income remains stagnant. And those who can afford to graduate, finish with ever-growing college-loan debt. So what is a college degree really worth?I am female, 20,a young and big beautiful woman in US,i just wonder if i can meet a man who can love me here,because i am single at present and i need someone¡¯s support..i uploaded my hot photos on kissbbw.c om under the name nancy099,maybe you want to check out my photos first!
10-19-2010 @ 2:25PM
shan said...
the cost of getting that degree is getting harder for more people to achieve. It's a given that the majority of Americans -- college and high school grads alike -- can agree on that point..I love this , So does My boyfriend .he is almost 11year older than me .i met him via age'lessmate.c'om a nice place for seeking age le ss love.which gives you a chance to make your life better and open opportunities for you to meet the attractive young girls and treat you like a king. Maybe you wanna check it out or tell your friends..
10-19-2010 @ 2:29PM
Jenny said...
I have a two friends - one with a college degree and one without - Http://www.bestcareershoices.info They both have the same job at different locations, and they both make the same money.
10-19-2010 @ 2:25PM
terry said...
DO you mean after the teachers unions are finished with us ?
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10-19-2010 @ 2:52PM
Karen said...
I graduate in May. Not including my Spring semester of this school year, I have seriously $43,000 in debt, and I worked for 2.5 of the 4 years to alleviate some of this! I am married and would love to start a family, but I cannot do that because of this looming debt. Hell, I may have to join the military to get a job! I'm getting a B.S. in Accounting, minoring in Religious Studies (had to have a little fun :P and it didn't cost extra since they require so many electives). So this doesn't include grad school, which I would need to truly excel in my field. I guess we'll see, but it isn't looking pretty. Financial aid is a broken system, where even an independent or abandoned student is FORCED to be considered as a dependent legally until they are like 23, married or a parent themselves. I am definitely starting savings accounts for my children, when I finally get to have them, this has been TOUGH!
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10-19-2010 @ 3:26PM
Dan said...
I graduated just over 2 years ago from a private university with about $24k in debt - slightly above the national average. I completely financed my own college schooling by merit-based scholarships, grants, federal loans (of course) and by working my last 2 years. I graduated with honors in comp engineering and now am enjoying a solid $65k a year job that I love, am married, recently purchased a town home and 2 new cars. I have accomplished all of this through hard work and dedication to planning my future and now I am reaping the benefits. If you don't screw around and party through high school and college then yes, a degree is definitely worth it! And please, no more whining from the ignorant fools who majored in psychology or history or communications and can't find a job -- I hope those easy classes were worth it!
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10-19-2010 @ 7:07PM
Areba Bennihoff said...
Well, Dan, 2 new cars and a new condo. You'd better hope that you'll be able to pay this all back. it's easy to sign on the line, but paying it back is another matter. Wow, a SOLID 65K a year. My husband who is a truck driver brings more in then that a year. Oh, and we have 2 new cars ( paid for) 1 dirtbike, and 1 4-wheeler, paid for) and a half million dollar house which is within 17 thousand of being paid for. And that's a SOLID 17 grand. Talk is cheap, my dear, you'd better hope your a good money manager. or. you'll be like the millions of other college grads, who are in forclosure
10-19-2010 @ 3:33PM
Laurie said...
I dropped out of school in 2005 and made a few investments of time and money in a tugboat company that failed to produce anything for me. I am 26 now just gave up on the tug boat venture, and still work in pizza which I have been using to help with basic living and tug boat costs since the drop out. I am absolutely sick of working in such a low totem pol job and I will be returning to school in a couple of months to actually start courses that will give me a paycheck that I can actually let me do things outside of work (such as going out to eat, going to the movies, and having real hobbies.) I am used to living poor, but I would like it to change in a couple of years after obtaining a degree.
For those that made it without a degree and became successful entrepreneurs, you have something I do not and I look up to you.
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10-19-2010 @ 5:06PM
German & Maria said...
You are right on. Knowledge cannot be taken away from you and you can always go to a foreign country if you choose the right degree. I hope you dont fall into the hands of the Maoist Professors, antiamericans whose only purpose is to destroy this country. Good Luck and God Bless!
10-19-2010 @ 4:08PM
German & Maria said...
I am glad I convinced my children into not going to one of these universities. They became successful business owners. They have traveled and enjoy life, of course under the stress of performance, that subject that the radicals hate so much. They live in the best neighborhoods and their children attend private schools. When you see what happened today with Christine O'Donnell you wonder why should you pay these radicals universities. Christine was right, she answered correctly, yet the media tried to make her looked like a fool when she had the right answer. People with money and with the ability of creating jobs, will leave this country for greener pastures. Stop this wave of socialism and give a "Chance" to the republicans, if they dont work, we will also dispose of them.
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10-19-2010 @ 4:18PM
sydney said...
Let me tell you, a college degree is very much worth it if you can finance that degree without accruing debt that will follow you for the next 20 yrs. Many people need to understand that 4 yr universities are not for everyone and Technical and Community Colleges offer viable alternatives. My best employees are the ones who have specialized skills. We need to stop pushing higher education when we can't find a reasonable way for people to pay for it. Yes, Doctors, Lawyers and people in very highly skilled professions where one's life is at stake, need more education, but come on, you don't need a degree to do marketing, PR, Business (you either have a head for business or you don't), Entertainment, etc. That is a waste of time and money. Acquiring knowledge is never a bad idea, but most of what really smart and intelligent people know, they learned on their own.
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10-19-2010 @ 5:05PM
Olivia said...
I agree that some smaller colleges are the way to go these days. But if you went through school years ago like myself & having accumulatted bills its not such a great thing. Just adds to debt that I can barely afford as it is.
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10-19-2010 @ 5:20PM
chucki42 said...
college is something i wanted for one of my goals in life. i have an associates, bachelors and 2 masters. the job i am in makes damn good money as in 6 figures but they just wanted experience. my shop chief on has a ged.
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10-19-2010 @ 5:44PM
David said...
My wife went to work at Wal-mart with a GED in hand. I never would have believed it....,,, First year she made $25,000, next she made $35,000, 3rd year was $45,000 + Bonus, fourth and fifth year, $60,000 or $65,000 + Bonus, Last 2 years = $130,000 with bonuses per year. After just 5 years with Wal-mart, she was a Store Manager running her own store and continues to do so. And it didn't cost a penny for degrees! You guys should check it out!
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