Is a college degree worth the investment? We’ve talked in the past about the value of a high-end college degree. Today I want to take a step back and consider the value of a college education in general.
The cost of a college education
For starters, let’s take a look at the cost of a college education. According to CollegeBoard, a private four-year college in 2009-2010 costs an average of $26, 273/year. In contrast, the average cost of a public four-year college is $7, 020/year (presumably for in-state tuition/fees).
Adding it up, and ignoring possible inflation while you’re attending, students attending a public school can expect to pay around $30k for a four-year degree, whereas those at a private school are looking at a tuition bill somewhere north of $100k. Of course, there are also living expenses, though you’d likely incur those whether or not you were in college.
Earnings as a function of education
Next up, let’s take a look at the effect of education on your earning power. While there are obviously exceptions (e.g., Bill Gates, LeBron James, etc.), the general rule is that your earnings increase significantly with increasing education.
What follows is a breakdown of the 2009 median salary numbers of full-time workers aged 25 and over based on their level of education.
|Level of educaton||Median salary|
|Advanced degree||$69, 056|
|Bachelor’s degree||$53, 300|
|Some college/associates’s degree||$37, 752|
|High school diploma, no college||$32, 552|
|Less than high school diploma||$23, 608|
Simply finishing high school results in a 38% in median salary, whereas completing that bachelor’s degree results in a 41% increase over some college (or an associate’s degree), and a whopping 64% increase over just having a high school diploma.
Unemployment as a function of education
Finally, let’s set aside earning potential for the time being, and simply look at unemployment rates as a function of education. As you’ve no doubt heard, things are tough all over… Or are they?
What follows is a breakdown of unemployment rates as of February 2010 based on level of education.
|Level of education||Unemployment rate|
|Bachelor’s degree or higher||5.0%|
|Some college/associate’s degree||8.0%|
|High school diploma, no college||10.5%|
|Less than high school diploma||15.6%|
While unemployment rates have been hovering around 10%, those with a college degree have an unemployment rate that’s right around half the national average.
While all of the numbers in the table above are higher than normal given the current state of the economy, a college education appears to provide a clear benefit when it comes to finding and/or keeping a job.
You make the call
So… Given the above numbers, what’s your take? Is a college degree worth the investment? In my book, the answer is yes — assuming that you’re qualified. That being said, it also pays to make smart decisions when it comes to selecting a major.