With the rising cost of a decent college education taking its toll on the middle class, during an economic downturn, one has to wonder: Is college still a good investment? The unspoken rule has always been that a college diploma holder would be most likely to succeed in a job line up. But is this still the truth? Investopedia shared that for the 2014-2015 academic year, the average tuition cost for out-of-state students was a whopping $22,958 with the tab at private institutions even steeper, at $31,000 on average. Is completing college worth it? The general consensus is that yes, college is still important and still a good investment.
An article in Forbes states that going to college is your best financial bet, in terms of ROI, even with all the possible business and investment ventures available for the more experienced young businessman. The article makes an example of the plucky young investor who would rather spend his college tuition on purchasing stock or buying and reselling goods. It claims that your college degree is still a better risk than a well placed stock investment, and in some cases would yield a better profit. Data from the Bureau of Labor Statistics (BLS) confirms this, proving that a college graduate will earn $1 million more than a high school graduate, over his or her lifetime. The study, done in 2016, showed that people with a college degree made approximately $1,156 per week whereas those with a high school diploma earned only $692.
According to Brown Center of Education Policy expert, Beth Akers, there is a risk and return either way. Not all colleges or degrees are created equal and deciding where you go to study, and what you study, makes a big difference in your pay check at the end of the day. Akers shared that a partial degree does not get you partial reward. It has become increasingly more dangerous for students, especially those who have chosen to study subjects that lack interest to them, to drop out, resulting in them having to pay back thousands worth of college loans with no actual diploma to show for it. Akers went on to say that the risks include completing a degree that historically leads to low pay. Payscale lists Studio Art and Early Childhood Education as two examples thereof.
Vice President at the American Institutes for Research, Mark Schneider, explains it matter of factly: “If you know how to fix things or how to fix people, you end up with a high return on your investment.” In an analysis done by Salary.com, researchers found that the best long-term ROI is found in degrees such as engineering, marketing and human resources.
Choosing the right school also holds some profit, with the more expensive colleges providing the best ROI. Institutions such as Harvey Mudd College, California Institute of Technology, The Massachusetts Institute of Technology and Stanford University made the top of the Forbes list.
Finance reporter, Jason Notte, explains that unless a student is gifted or skilled enough to start a business at a young age, applying for a college education should be a no brainer. In fact, a study done by Bankrate.com found that nearly 90% of college graduates say that their education was worth the cost. Investing in higher education generally leads to greater opportunities, more profitable income potentials and higher seats on the corporate food chain.
One wonders if the rising cost of higher education will eventually make college and equivalent institutions an unobtainable dream to those who are unable to afford it. But the good news, according to an article on Highered Jobs, is that grant aid has also increased by 55%. And with public institutions and low cost community colleges offering lowered fees (compared to that of its more elite counterparts), borrowing to pay back college tuition fees does not have to be such a heavy burden to bear. In an eye-opening survey, Pew Research Center showed that more than 70% of those who completed college are currently employed, compared to the 54% to 64% of those who did not have degrees. It seems that despite the economic downturn it still makes more financial sense to be paying off your student loan, while holding a degree, than to forgo college altogether.
“The ultimate value of attaining a degree lies in a place far beyond the practicalities of personal financial risk and reward.” shares Eileen O’Leary, Assistant Vice President of Stonehill College in Massachusetts and National Chair of the National Association of Student Financial Aid Administrators (NASFAA). “It is not often acknowledged but is nonetheless true, that our society benefits from a more educated citizenry.” In an article, O’Leary offers her unique view, echoing the very heart of Thomas Jefferson: An educated citizenry is essential to a strong and free democracy.
According to O’Leary, data confirms that voting rates and the public’s interest in community is higher among those with college degrees. She shares that major factors such as overall unemployment, yielding of retirement plans, health insurance coverage, and tax revenues are all affected positively as well. Things like job satisfaction, potential for higher earnings, social mobility and better health are also affected, according to The College Board, thus resulting in a higher quality of life. Another report shows the vast difference of health-related behavior, reliance on public assistance programs and civic participation, in a group that furthered their education after high school compared to those who did not. An interesting study done by the Pew Research Center in 2015 suggested that the divorce rate for college graduates was only 26% when compared to that to the 43% of high school graduates.
Attending college or a higher learning institution will open doors to increased salary opportunity, growth in your professional and individual life and will help to extend your focus and broaden your worldly viewpoint. Students who invest in college, after high school, are more motivated to succeed, yield a more realistic plan for accomplishing goals and, according Pew, are most likely chasing their career of choice rather than settling. Without a doubt, when taking all of these factors into consideration, it is evident that college is still a good investment and a benefit to society as a whole.