Is College Still Worth It? 3 Studies that Say Yes

Carol Katarsky Updated on December 1, 2020

There’s no doubt college degrees have value, but as the costs to families continue to increase, it’s little wonder so many students and their families are starting to wonder: In pure dollars and cents, is college actually worth it?

Spoiler: According to these three surveys: Yes, it is…most of the time. Below, we break down the stats and provide some help in figuring out if college is worth it for you.

College degrees mean higher income

The cost of a college education — and the loans most students use to pay for it — are a legitimate financial concern. But a study by the Federal Reserve Bank of New York confirmed that people with college degrees earn significantly more.

According to the study, the average college graduate earned about $78k compared to $45k for workers who have a high school diploma. That’s a significant difference, especially when you consider the effects during a working career.

However, there are exceptions. People who graduate in the bottom quarter of their class, drop out, or take more than four years to finish, are less likely to see those financial benefits. If you have reason to believe you might not finish on time, taking on debt to go to college is a bigger financial risk.

When evaluating your acceptances and financial aid awards, review the total out of pocket costs you’ll have at each. You should also have a good estimate of how much you can reasonably expect to pay back and how you’ll pay it back.

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College graduates have a higher net worth

A similar study by the St. Louis Federal Reserve Bank found that over time, college graduates have an “Income premium” of nearly 100% compared to high school graduates. They also have a higher net worth: The median net worth of people with a four-year degree was $290k in 2016, compared to just $53k for non-degree holders. College graduates were also more likely to own their own home, be married, and report being in good health.

There are two wrinkles worth noting though. The overall increased net worth of college degree holders wasn’t equally spread out among demographic groups. There are benefits to a degree, but everyone’s not getting the same-sized piece of the pie.

The researchers also found that the higher net worth enjoyed by college graduates has been declining— even as the income boost has stayed roughly the same. One of the reasons for that is the increasing costs of college. A higher income only helps so much if one-fourth if your income goes to paying off loans.

To ensure your degree gets you the most bang for your buck (and your time) your best bet is to minimize the cost of your college degree.

College graduates have access to more, and higher paying, jobs

College degrees also open doors to a wider, and generally better-paying variety, of professions. That’s particularly important in today’s fast-changing economy. If you have a degree, it’s easier to pivot to different types of work if you need to respond to a recession or a technological change that alters an industry. 

A study by Georgetown University’s Center on Education and the Workforce found that between 2010 and 2016, 99% of new jobs went to workers with either an associate, bachelor, or graduate degree.

For certain industries and professions, a degree is essentially be mandatory. Do your research so you know what the requirements for your targeted field are, as well as the types of jobs within it and their requirements. In some fields, a bachelor’s is required just for entry-level jobs with the best opportunities reserved for those with graduate degrees. Other fields, such as the arts, put more emphasis on experience than a formal degree. How important a degree is to you will depend on how necessary it is for your intended career path.

If you decide college is the right financial choice for you, that doesn’t automatically mean you have to take on huge amounts of debt. We have tons of resources to help you qualify for financial aid, scholarships and grants, and loans with the most favorable terms and rates.  

About the Author
Carol Katarsky

Carol Katarsky is a contributing writer for Nitro. She is an award-winning journalist with extensive experience writing about both finance and education. Her corporate and non-profit clients include AIG, Children's Hospital of Philadelphia, and the Project Management Institute. She lives in Philadelphia with her husband, son, and one cat more than she should. Read more by Carol Katarsky

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