Most students applying to college for next year will receive their acceptance letters sometime between mid-March and mid-April: Congratulations!
Yet more people these days are questioning the value of a college degree. The doubts reflect the trend toward higher tuition costs and rising student debt. The wage premium college graduates earn compared to their high school-only peers has stagnated. Critics have put elite colleges and universities under fire for a variety of reasons.
But data and labor market trends continue to highlight the strong returns from investing in higher education. A bachelor’s degree tends to open doors to jobs with better pay, benefits and opportunities for advancement. The unemployment rate of college graduates is lower than their less-credentialed peers. A Pew Research Center study found the typical college-educated worker age 25 to 34 makes about $70,000 a year. That’s a significant pay premium compared to their high school-educated counterparts making some $40,000.
Of course, students and parents need to be financially smart and wary of borrowing (much) for college. The cost of college matters. So does keeping debt low. You might need to make some tough choices about where to go based on keeping the costs reasonable. (Dramatic reform is called for: The reliance on student loans to pay for college isn’t working. Young graduates shouldn’t start their careers hampered by debt payments.)
A four-year degree isn’t for everyone. The long-term return on graduating from a public college or university with a bachelor’s degree is greater than the comparable figures for an associate degree or certificate from a public institution. But the return on investment from earning the latter two are still impressive.
The Center on Education and the Workforce calculated investments in certificates and associate degrees pay off quickly and better than the bachelor’s degree through a 10- to 20-year span. The reasons reflect the lower cost of paying for an associate degree and certificates, as well as less time out of the job market.
During a 40-year timeframe, the bachelor’s degree pays off with the highest return. The median return on investment on a bachelor’s degree at a public institution through 40 years is $1.8 million. The comparable figures for associate degrees and certificates earned at a public institution: $1.4 million and $1.3 million, respectively.
The takeaway: Research and experience show investing in postsecondary education — from certificates to bachelor’s degrees — can pay off big.
