Students and their families can take a deep breath, as new research from the College Board finds that a college education is financially worth the investment.
Those with a four-year degree are significantly more likely to stay employed and move up the socioeconomic ladder, the researchers found. In just over 10 years, they’re able to earn back the money they spent in tuition and be set up for a lifetime full of higher earnings.
“Although obtaining a college degree can mean forgone wages during a time when a student is also paying tuition, by age 33 the average bachelor’s degree recipient will have recouped those costs,” Jennifer Ma, senior policy research scientist at College Board and a co-author of the report, said in a news release.
“A higher education is an investment that pays significant dividends over the course of a lifetime — even for students who accumulate some debt to obtain a degree,” she added.
The median income for bachelor’s degree holders over the age of 25 and working full-time was $24,900 more than that of high school graduates in 2018 — $65,400 for the former compared to $40,500 for the latter.
In addition, the researchers determined that a college degree leads to more job stability. The unemployment rate for people ages 25 or older who hold at least a bachelor’s degree has consistently been about half the unemployment rate for high school graduates. In 2018, the unemployment rate for people with a four-year degree was about 2 percent, compared to 4 percent for those whose education stopped after high school.
And over the course of their lifetimes, those with a bachelor’s degree earn about $400,000 more than those who only have a high school diploma. And that’s factoring in the cost of their degree. Even those with an associate degree can reap financial benefits, although theirs are “roughly half as large,” according to the report.
“As the price of college continues to rise, more students and families are asking if college is worth it,” the authors wrote in the report. “Media headlines highlight stories of college students saddled with debt without gainful employment. Although these stories do exist, they are far from typical. College is a worthwhile investment that pays off over time for most students.”
Barriers to college
This research bodes well for those who can afford college. It shows that the money they spend on tuition won’t go to waste, as it will benefit them in the long run.
But for many, the steep cost of college prevents them from going in the first place. In 47 out of 50 U.S. states, low-income students would need to pay at least $3,000 to attend a public four-year institution, even when accounting for federal aid, grants and scholarships and working 10 hours a week, according to The Education Trust.
To them, the College Board’s findings will mean next to nothing until more pathways are paved for them to earn their four-year degree.
A few 2020 presidential candidates, including Sen. Bernie Sanders (I-VT), Sen. Elizabeth Warren (D-Mass.) and others have backed the idea of free college for all, while others such as Sen. Amy Klobuchar (D-Minn.) have suggested making college more affordable by expanding Pell grants, among other things.
Some states and local communities, too, have begun to implement programs, such as College Promise, that aims to make “the first two years of college as universal, free, and accessible as high school.”
Yet, at this point, cost remains a huge barrier to a college education, particularly for low-income and minority students.
“Given the high payoffs of postsecondary education to both individuals and society as a whole, it is important that we increase college opportunity for all who can benefit and also improve completion rates,” Jessica Howell, vice president of research at the College Board, said in the news release. “Higher education is a powerful driver of social mobility for lower-income students, and it’s critical that these students have every opportunity to attend and thrive in college.”