Is a College Degree Still Worth It? >
A Degree Is Well Worth the Time, Cost, and Effort
Tuition and student debt have not grown "unmanageable"
November 17, 2011
About Cecilia Elena Rouse:
Cecilia Elena Rouse is the Katzman-Ernst Professor in the Economics of Education and Professor of Economics and Public Affairs at Princeton University. Her primary research interests are in labor economics with a focus on the economics of education. Rouse has served as an editor of the Journal of Labor Economics and is currently a senior editor of The Future of Children .
If you listen to the pundits these days, a college degree is just not worth it. It costs too much and the payback is too little. All you will end up with is debt, frustration, and--if you manage to stick it out, which many don't--a worthless degree.
But they are wrong; for most students, the benefits will outweigh the costs. First, when considering the direct costs, tuition and student debt have not grown "unmanageable." The "sticker price"--the published tuition and fees--is actually much higher than what students pay. According to the College Board, the average in-state "sticker price" at a public four-year college is $8,240, but the amount that students actually pay on average is $2,490. This is because one has to account for grant aid and federal education tax credits. In fact, given these sources of financial aid, students attending public two-year colleges on average didn't pay anything and in some cases actually made money.
[Average Student Debt Reaches All-Time High.]
Similarly, claims of skyrocketing student debt have been exaggerated. Yes, more students are borrowing to pay for their studies; approximately 66 percent of four-year college graduates borrow money to pay for school, and among those, the average debt is just under $20,000; fewer than 10 percent of those who borrow owe more than $30,000. While this is not insignificant, it does mean that a full 34 percent do not borrow to pay for their four-year college degree, so the overall debt owed is less than pundits would have you believe.
The biggest cost of attending college is the foregone income not earned from working full time. And yet one of the best documented relationships in economics is that between education and labor market outcomes. Those with a college degree are more likely to find a job in the first place and earn more; the median annual income of a college graduate (with no further schooling) is about $46,000--nearly $21,000 more than the median high school graduate earns. This advantage adds up significantly over a lifetime. Some argue that these gains are not due to colleges themselves but merely reflect the talents that students bring to their studies, but years of research in economics finds that more education does cause much of the increase in earnings. And not only do those with more education enjoy higher incomes, they are also healthier and there is good evidence that their children will be better off as well.
[Today's Young Adults Suffering More Financially than Older Generations.]
That said, as with any investment there is some risk. This is why it is important that students fully understand the terms of their loans and obtain as much information as they can about the earnings they are likely to receive in their chosen careers. This is also why the Department of Education has designed alternative repayment options for federal student loans, such as Income-based Repayment, that help those who are finding repayment a financial hardship.
In general, if you compare the costs to the lifetime benefits of a college degree, it is clear that for most students the degree is well worth the time, cost, and effort.
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Corrected on 11/17/11: An earlier version of this article misstated the percentage of students who do not borrow to pay for their four-year college degree. Thirty-four percent of students do not borrow to pay for their four-year college degree.
- Other Arguments
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#18030
Yes — The return on a college investment is more than that on almost any alternative
JULIE MARGETTA MORGAN, Policy Analyst with the Postsecondary Education Program at the Center for American Progress
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#26029
No — Four to six years of partying do not equal an education
CRAIG BRANDON, Author of 'The Five-Year Party: How Colleges Have Given Up On Educating Your Child' and 'What You Can Do About It'
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#34317
Yes — Like any smart investment, the pursuit of higher education requires effort to explore the options
PETER KONWERSKI, Senior Associate Vice President and Dean of Students at George Washington University
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#44322
No — We now have nearly 80,000 bartenders and taxi drivers with bachelor's degrees
RICHARD VEDDER, Director of Center for College Affordability and Productivity
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#52611
Yes — Students and their families should not simply assume that college will be "worth it"
ROBERT B. SCHWARTZ, Francis Keppel Professor of Practice in Educational Policy and Administration at Harvard University
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#64128
No — Put more courses online and limit federal student loans to four years of undergraduate work
LINDSEY BURKE, Senior Policy Analyst in Domestic Policy Studies at the Heritage Foundation
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#72919
No — What's the message when grads can't write a simple E-mail?
NAOMI SCHAEFER RILEY, Author of 'The Faculty Lounges ... And Other Reasons Why You Won't Get the College Education You Pay For'
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#82316
Yes — Encouraging students to go to college is the right choice
ANTHONY P. CARNEVALE, Director of Georgetown University Center on Education and the Workforce
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#92218
Yes — People need to go to college in order to have a fighting chance at a well-paying career
KEVIN CAREY, Policy Director of Education Sector
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#101816
Yes — College often provides the first opportunity for students to direct their own education
TOM CARROLL, President of the National Commission on Teaching and America's Future
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#111720
Yes — The return on investment in postsecondary education remains compelling
CHRIS FARRELL, Economics Editor of 'Marketplace Money'
Reader Comments Read all comments (2)
Conor of NJ 6:19PM January 06, 2012
FRANK of MD 1:33PM November 20, 2011