Having one may get you a job, but at what financial cost?
Does going to college pay? Answer isn’t simple
Does it pay to go to college?
If you check www.collegeboard.com, you’ll find a reassuring study showing that education really does pay.
Without considering the intangibles, the study shows that each additional level of education draws a higher lifetime income.
While the median high-school graduate age 25 and older earns about $26,000, the median college graduate age 25 and older earns about $42,000. That’s an annual income premium of about $16,000, or around 60 percent.
Not bad, particularly when you consider that the difference also allows you to escape doing heavy lifting.
Yes, the college grad will spend years paying off loans. But eventually the earnings net of loan payments will pull ahead of the high-school graduate’s. So, case closed. It may hurt to write the checks, or borrow, but college pays.
Well, maybe not.
I can relate to this story. I take my brother and myself as an example. We earn about the same amount of money today. He ended his education at HS. I teach at a college.
I like to think that I’m ahead because I have options. If my job goes to crap, I can always work for him. 🙂
That’s why it’s a bad idea to go to college on a large student loan — choose a cheaper college if you need to, but don’t owe a large amount. That’s the only way to ensure the thing works out in your favor. (Though make sure they’re accredited with the right schools — make sure their credits are transferable elsewhere is a good idea.)
Seriously. Aside from a few companies who seriously consider WHERE you went to school as exceedingly important, most places don’t care anymore once you’ve had 4-5 years of experience.
it’s the same thing my dad always told me and truer today — get a skill that pays well and don’t expect that just because you got a degree that the world owes you a living.
sounds harsh? well, i’m a straight up liberal, and i believe that with hard work and an understanding that working toward a better community only benefits yourself, you can make a great life for yourself in america.
everyone who whines that taxes are too high, or that so-n-so’s taking our jobs is a lazy shit who’s looking for someone else to blame for their own bad attitude.
My wife’s niece just graduated with an English degree and $21K in loans. That’s almost criminal, like a pay day loan for education. The fact is there are too many kids going for four year degrees. You can blame this on societal and parental pressure.
The jobs that pay enough to repay college loans are all being outsourced. If not now, soon. I pity the current generation.
It would probably be better if the Feds stopped handing out student grants. The colleges just see the extra money that students can afford and raise their tuition prices.
The jobs that pay enough to repay college loans are all being outsourced. If not now, soon. I pity the current generation.
So, get an education and start up a new company.
If I had to make payments on a college loan, I wouldn’t have been able to buy a house! College is for the rich.
An education can never replace drive and fortitude. Interesting study, however.
Post secondary education should be free in all State sponsored schools.
Parents dont let your babies grow up to be Philosophy majors, if they like to eat.
Im sorry,
But Im a believer that we should have Tech schools that TEACh you hands on, jobs… AS you are working for them.
Apprentice programs also…ANd not for the RICH only..
A great exercise in fallacious arguments. How many can you spot? I’ve paid off my loans, on my own. It just seems like the author is carping for some reason.
Education is expensive and you’re not going to be able to get a Lexus for a while. Tough!
College ain’t for everybody. It can be a good place to lay low after high school. It’s a good place to meet college girls. When I’m giving inspirational advice to the young folk, I’ll tell ’em that college grads earn ONE MILLION DOLLARS more during their lifetime, on average, than someone that doesn’t go to college.
How many here who think college is not a good investment will do or think differently for their kids?
Parents are being cajoled, pressured and guilt tripped into sending their children.
As an investment, I doubt it pays off. As for actually educating, well it’s possible.
#10 – I don’t know if I’d say free, but in general I agree. With the amount of tax based funding we’re already flooding into public colleges and universities, tuition has risen to a ridiculous level.
It’s another case the money they already have needs to be used efficiently and waste free before they go looking for more.
Unfortunately, I have a real-world example of how questionable having a college degree is. I have a friend with only a high school education who started working at a semiconductor manufacturer a year after I started school. During the years I was at school, he gradually worked through the ranks of this company and gained experience with analytical tools used in the industry. At the time I got my first job out of college (in engineering), his salary had surpassed my employer’s offers to me by about $5k, and has remained consistently higher than mine ever since. His wife, with a similar background (only HS education), started at another semiconductor firm about two or three years after he started his job, and is now a managing “engineer” (actually has the title printed on business cards) making roughly 10% MORE than me with an increasing salary trend, still no college degree. These friends are easily passing $100k/year combined earnings. One of their friends took a similar career track, and I recently heard that this person was awarded a $70k bonus due to corporate earnings. Still no degree.
A few years ago, my brother was working as an undegreed (again, HS only) programmer for a software company making about 60% more than me. With the way he lived, that could have gone completely into savings, and he could have paid for a house in cash within just a couple of years.
I’m an aerospace engineer, and I have no outstanding debts. I didn’t incur much debt through college by living with parents and living fairly frugally, so I never had a huge payoff after graduation. I still try to live frugally.
Yet, all things considered, these people have long since passed my financial standing (my salary, my total net earnings to date, my ability to provide for my family in the future, etc) in the world, and are still going.
So, at this point in life, I’m struggling with being able to see that college is a real benefit.
Brian, I don’t know how old you are but your story would be more common in older people (over 50). There was a time one could rise up through a company and be promoted on merit without benefit of a higher education.
Now? In the auto manufacturing area (Ford for sure), one has to have at least a bachelors for almost all salary jobs, and promotions without a masters is almost non-existent.
I didn’t finish high school due to a illness in my junior senior tear that kept me out for a extended time. After working for several small companies I started my own general contracting company when I was 24. by the time I was 28 I was pulling in 200 K + a year. I knew what I wanted to do and I made it happen. In the beginning I worked 16 hour days 7 days a week and did everything myself now I’m 35 and work 6 hours a day and have 13 other people that do the work for me, none of them seem to have the ambition to do what it takes to get ahead, that seems to me to be the biggest problem with the youth of today, they act as though they should have every thing handed to them and don’t want to earn it. with the proper motivation collage is not needed.
#8 – If I had to make payments on a college loan, I wouldn’t have been able to buy a house! College is for the rich.
I bought my house first and waited a few year to start my Masters degree. Yes, I have a big loan to pay off–and I am by no means rich–but I also have plenty of home equity.
Yea, well my particular individualized history is blah, blah, blah
and I have a friend who blah, blah, blah,
and I have a relative who blah, blah, blah.
Interesting when it comes to averages?
The larger corporations almost demand degrees, but honestly it’s mostly for show; one VP or Director being able to show how many BS’s or MBA’s work for them.
It’s also a shame that we are devaluing some degrees over others. Why does everyone think that we need only more math and science graduates? Wouldn’t it be enough if we were taking more time to simply teach more folks to just think clearly?
The only way to make money in America is to be corrupt. Honest people rarely make money to write back home about. My father owned his own business but pocketed 33% of the receipts as tax-free cash. He never got busted and his kids all went to private school. The U.S. government is not looking out for nobody but themselves. And by the way, four of us finished college and are more honest (we work for corporations where Uncle Sam takes his cut before we even get our checks).
The only thing left is to play the stock market…
#4 My daughter got a english degree seven years ago. She has been gainfully employed ever since. For the last three years in Asia and Turkey. Oddly enough the rest of the world wants to learn english. Her education ran about $80,000 for four years. This was the best money I ever spent. My career was more like #19 I did instill a strong work attitude in her as she worked for me from age 14 till she left home.
The problem with this article is that it assumes that collage is all about dollars and cents. It’s not. It’s about knowledge and personal growth. There’s more to life than money.
#7 – So, get an education and start up a new company.
Comment by Jägermeister — 10/8/2007 @ 7:05 am
He doesn’t need an education to start a company… He only needs one to get a menial job within a company that someone else started.
#25 – There’s more to life than money.
But there isn’t anything more to bills and debt than money. The bank really doesn’t care how personally fulfilled you are. They want their money.
I’m not saying that secondary education isn’t a good thing. Or that it’s not necessary for certain occupations. But here’s what I am saying. If everyone had a college degree, then employers would have to find some other reason for not hiring 99% of their job applicants. Like, “Oh you didn’t go to the right college.” or “… an Ivy League College. Sorry, good by.” In many cases, it’s just being used to make deciding who gets the job, an easier one. For years I’ve either fixed or improved things that electrical engineering grads fouled up in designing. But they’re always the ones with automatic job security, not me. Because the managers always take the easy way out, when it comes time to decide who get promoted or let go. They don’t even pretend to think about it. The college grad sticks around. The HS grad, with years of vocational and practical experience, leaves. And if we all had a college degree of some kind. The managers would just pick some other lame criteria for weeding out their surplus work force. Because higher management (with college creditials no doubt) screwed up, and drove the business into the red. So their solution is naturally to keep even more clueless people around, thus making them feel good.
I once though people with any kind of engineering degree in their field would actually know their field. I was in for a shocker when I worked for this big corporation. They didn’t know much compare to someone who had the experience. All they knew were “book” knowledge. They threw around degree names like it was a contest but in reality they weren’t any better. Really though. School is not about how smart you are or can be. Its if you can concentrate and do the work.
I’m not saying college is a bad thing, but the truth is its not for everyone. If you plan to work for a corporation, then yes, they like those terminology.
Good post. You make some great points that most people do not fully understand.
“While the median high-school graduate age 25 and older earns about $26,000, the median college graduate age 25 and older earns about $42,000. That’s an annual income premium of about $16,000, or around 60 percent.”
I like how it was explained. Very helpful. Thanks.