Is a college degree worth the investment?
As recent U.S. news focuses on the high unemployment rate and rising student loan debt of college graduates resulting from a bad economy, one question is repeated: Is a college education really worth the money?
There is no question that a college or university education can be costly, with schools in America averaging annual tuition costs from $1,000 - $51,000 and costs rising every year. There are multiple scholarships available for students to assist with these costs, ranging from GPA-based merit awards to corporate-sponsored contests. Students can also fill out the FAFSA to see if they qualify for government financial aid, including both grants and loans. After all options are exhausted, students normally turn to financial institutions for student loans. With these financial challenges, it is not surprising that people are beginning to question the value of a college education.
Regardless of the cost of a higher education, Adam Looney and Michael Greenstone of the Hamilton Project answer that a college degree is worth the investment long-term. On average, a four-year college degree has a ROI of 15.2 percent per year, more than stock market or corporate bond investments. According to their studies, by age 50, a college graduate will earn on average $46,500 more per year than a high school graduate.
Research recently published in the Los Angeles Times values a four-year degree at $570,000, an investment with returns that students can control. The answer from these and multiple other studies is: yes, a college education really is worth the money it takes to get a degree.
There are also multiple plans in action to better assist students with their school decisions and debt. To help with the cost of college, President Obama has proposed the “Pay As You Earn” initiative to help students decrease their student loan debt. This plan would not only decrease student loan payments to 10 percent of discretionary income, but also forgive debts of current college students after making payments for 20 years. This plan is an effort to allow more students to go to school and be able to afford their debts after graduation.
The U.S. Department of Labor is also working to provide students with information regarding which schools are best for the career path they choose. These “Gainful Employment Reports” will give students information regarding graduates’ jobs and earnings for schools in states that participate in the partnership. This system could change the way that students think about and choose the right college.
In the midst of questions about the value of a college education, it is important to remember that education provides choices; choices of careers that would otherwise be unavailable without a degree. Although times are financially difficult, it is clear that a college education is as important as ever in establishing a successful career path.