Is College Worth It?

There is a common belief that the cost of getting a college degree has risen relative to the income of a typical college graduate, leading many to question the economic benefit of earning a post-secondary degree. The answer to the question “Is getting a college degree worth it?” remains a personal one, but the economic and intellectual benefits of earning a college degree remain compelling for many people. In this two part piece, I will consider the pros and cons of attending college, and come up with an answer supported by data. There are tricky and seemingly conflicting claims made about college education. For example, there is a commonly held view that the cost of attending college has skyrocketed, while more recent data reveal that the inflation-adjusted cost of tuition at many schools has declined. While the cost-benefit analysis of attending college depends on an individual’s circumstances, for students who do earn post-graduate degrees, the returns generally remain compelling.

The direct cost of attending college, which measures how much money college costs, has been falling over the past few years. On average, this direct cost is about $30,000 over the typical four years required to complete a bachelor’s degree. The indirect cost of attending college, also known as an opportunity cost, often represents the greater expense of obtaining an undergraduate degree. The largest indirect cost to consider is the wages foregone by a full-time college student who might otherwise pursue full-time employment with only a high school degree. The total average expense for attending college is $180,000, $150,000 of which comes from not having a job during the four years a person spends in college. This may seem like a lot of money, but individuals who elect not to complete a college education usually forego even larger gains, long term. 

For the majority of the past three decades, the median rate of return for attending college has been between 12 and 13%, an attractive financial return on investment. In fact, the college wage premium is at an all-time high right now as the real earnings of college graduates have increased at a faster and more consistent rate than those of high school graduates. However, this premium is not applicable to all students. A prime cause of decreased returns on completing college is the time required to earn a degree; for many students, earning a bachelor’s degree can take 5–7 years. For each extra year a person spends in college, the financial return decreases by 2–3%.

Another beneficial aspect of college graduation that is frequently overlooked is the strong alumni networks that colleges have to offer. Currently, according to Boston University, 70–80% of jobs are secured through employee referrals, social media recruiting, and hiring managers’ networks, meaning the majority of jobs are not coming from a traditional application process. Alumni networks can also be helpful for students during their time at college, as many alumni associations help students get internships while they are still in school. Having access to a network of a large group of people spread across the world can prove to be useful in countless ways to students who choose to tap into this resource.

On the other hand, another fact illustrated by research is that college does not pay off for roughly 25% of graduates. For some students, the low return on a college degree might reflect personal work/life decisions. For other students, it may be due to a factor that can be explained by data, like the major they select. For example, the median rate of return for people majoring in engineering is over 18%, while for people majoring in education, it is around 5%. Something else that research demonstrates can be a drawback to attending college is the amount of debt incurred. For some, debt is manageable, while for others, debt can make college not worth it. This is all determined by how many years of schooling a student selects to complete, where they attend, how much aid they are offered, and how much their school costs.

One often overlooked consideration when analyzing the benefits and drawbacks of going into college is the happiness aspect. Earning a degree takes many years, and the experience of being a student presents a mixture of joy or dread that depends on an individual’s preferences. Attending college involves many lifestyle changes, which may be liberating or threatening depending on personal circumstances. No evaluation about the merits of enrolling in college is complete without an honest effort to answer a difficult question: would you be happy to be a college student?