The Value of a College Degree


 


The Value of a College Degree
Escalating cost of higher education is causing many to question the value of continuing
education beyond high school. Many wonder whether the high cost of tuition, the opportunity
cost of choosing college over full-time employment, and the accumulation of thousands of
dollars of debt is, in the long run, worth the investment. The risk is especially large for low-
income families who have a difficult time making ends meet without the additional burden of
college tuition and fees.
In order to determine whether higher education is worth the investment, it is useful to examine
what is known about the value of higher education and the rates of return on investment to
both the individual and to society.
The Economic Value of Higher Education
There is considerable support for the notion that the rate of return on investment in higher
education is high enough to warrant the financial burden associated with pursuing a college
degree. Though the earnings differential between college and high school graduates varies over
time, college graduates, on average, earn more than high school graduates. According to the
Census Bureau, over an adult’s working life, high school graduates earn an average of $1.2
million; associate’s degree holders earn about $1.6 million; and bachelor’s degree holders earn
about $2.1 million (Day and Newburger, 2002).
These sizeable differences in lifetime earnings put the costs of college study in realistic
perspective. Most students today—about 80 percent of all students—enrol either in public
four- year colleges or in public two-year colleges. According to the U.S. Department of
Education report, Think College Early, a full-time student at a public four-year college pays an
average of $8,655 for in-state tuition, room, and board (U.S. Department of Education, 2002). A
full-time student in a public two-year college pays an average of $1,359 per year in tuition (U.S.
Department of Education, 2002).
These statistics support the contention that, though the cost of higher education is significant,
given the earnings disparity that exists between those who earn a bachelor’s degree and those
who do not, the individual rate of return on investment in higher education is sufficiently high
to warrant the cost.
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Other Benefits of Higher Education
College graduates also enjoy benefits beyond increased income. A 1998 report published by the
Institute for Higher Education Policy reviews the individual benefits that college graduates
enjoy, including higher levels of saving, increased personal/professional mobility, improved
quality of life for their offspring, better consumer decision making, and more hobbies and
leisure activities (Institute for Higher Education Policy, 1998). According to a report published
by the Carnegie Foundation, non-monetary individual benefits of higher education include the
tendency for post-secondary students to become more open-minded, more cultured, more
rational, more consistent, and less authoritarian; these benefits are also passed along to
succeeding generations (Rowley and Hurtado, 2002). Additionally, college attendance has been
shown to “decrease prejudice, enhance knowledge of world affairs and enhance social status”
while increasing economic and job security for those who earn bachelor’s degrees (Ibid.).
Research has also consistently shown a positive correlation between completion of higher
education and good health, not only for oneself, but also for one’s children. In fact, “parental
schooling levels (after controlling for differences in earnings) are positively correlated with the
health status of their children” and Increased schooling (and higher relative income) are
correlated with lower mortality rates for given age brackets” (Cohn and Geske, 1992).
The Social Value of Higher Education
A number of studies have shown a high correlation between higher education and cultural and
family values, and economic growth. According to Elchanan Cohn and Terry Geske (1992), there
is the tendency for more highly educated women to spend more time with their children; these
women tend to use this time to better prepare their children for the future. Cohn and Geske
(1992) report that “college graduates appear to have a more optimistic view of their past and
future personal progress.”
Public benefits of attending college include increased tax revenues, greater workplace
productivity, increased consumption, increased workforce flexibility, and decreased reliance on
government financial support (Institute for Higher Education Policy, 1998)
Conclusion
While it is clear that investment in a college degree, especially for those students in the lowest
income brackets, is a financial burden, the long-term benefits to individuals as well as to society
at large, appear to far outweigh the costs.

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