The College Payoff
It’s better than you think.
Posted Nov 22, 2019
As we all know, going to college in the United States costs a lot more today than it did 50 or even 20 years ago. For many years, the average cost of a college degree has been rising a lot faster than everything else. The most recent statistics show that the typical loan debt held by students who have taken out loans is nearly $29,000. That can seem like an insurmountable barrier to would-be students, and their parents, who are contemplating whether or not it is “worth it” to pursue a four-year degree.
However, it’s also a deeply misleading statistic. For one thing, it applies only to students who take out ANY loans, and only about half of students do. The other half either get scholarships or they or their parents pay along the way. Even more to the point, knowing how much you would pay to get a four-year degree is only meaningful if you also know how much it would pay off.
Now we know, thanks to a study just released by the Georgetown Center on Education and the Work Force. Their evaluation shows that as of the most recent year, the net economic gain for a graduate of a public university is $765,000 over 40 years. For a private school graduate, it’s even higher: $838,000. Not bad for that $29,000 investment.
There’s a lot variation among schools, of course. At the top of the Payoff list are health sciences schools, technology schools, and business schools, as well as a few elite universities. For those schools, the 40-year payoff is around two million dollars. But even for the most humble liberal arts colleges, the long-term payoff is many times the cost of going to college.
Lots of other research shows the College Payoff goes far beyond the monetary value. One eminent research team has studied this topic for over three decades. They report a variety of apparent intellectual benefits from attending college, in areas such as general verbal and quantitative skills, oral and written communication skills, and critical thinking. These advantages hold up even after taking into account factors such as precollege abilities and family social class background. In addition, the researchers describe a long list of non-academic benefits. In the course of the college years, students seem to develop clearer aesthetic and intellectual values, gain a more distinct identity and become more confident socially, and become less authoritarian and less ethnocentric in their political and social views.
Altogether, it makes a lot of sense for young people (and their parents) to do what they can to make it possible to reach the goal of a college degree, even if it means taking on debt that seems daunting at the time.
Unfortunately, about half of the students who enter a four-year college drop out before reaching the finish line—with financial reasons as the main cause. This could be due in part to a lack of awareness of just how large the College Payoff can be. It also means we need to step up, as a society, to get the word out about how important it can be to a young person’s future to get a four-year degree, and to assist financially the young people whose parents are unable to do much to help them reach that goal.