Is college worth the investment? You might not think so if you follow certain media threads, mostly written by college-educated individuals. It's become very popular to lionize those giants of industry who either did not attend college (Sean Parker of Napster and Facebook fame) or dropped out of college (Steve Jobs). And lately the trend is to point to free online education as a way to get the fruits of college without paying the freight.
Many Americans appear to have bought into the argument. A recent poll indicates that 57 percent of Americans do not view a college education as a good value for the price. One reason is that in the last 10 years, tuition costs have continued to increase while real family incomes have fallen across all income groups for the first time in decades.
Parents across the country writing college tuition checks might be inclined to agree with the naysayers. The evidence, however, points to a very different conclusion. While there are plenty of non-monetary benefits of getting a college degree, the economic benefits alone should assure anyone who has doubts.
First, you are more likely to be employed if you have a college degree. Although we have heard much about the challenges facing young college graduates entering the job market, unemployment for those with college degrees has remained under 5 percent throughout the recession. Yes, the unemployment rate for new college grads trying to enter the job market reached 9 percent in 2011. But compare this to 24 percent for new entrants who are high school grads and 32 percent for new entrants who are high school dropouts.
Once you get that job, you are likely to earn more if you have a bachelor's degree. The wage premium of a college degree continues to increase, with the average earnings for someone with a degree being more than twice that of a high school grad. The lifetime benefit net of opportunity and tuition costs for someone with only a bachelor's degree is over half a million dollars and greater for those with more advanced degrees.
Certainly, there are also many benefits of college that can't be measured in future earnings. These benefits accrue to the individual, his or her family and society. Adults with a college degree are more likely to volunteer in the community, vote, live healthy lifestyles, and have higher job satisfaction. They are also more likely to have healthy and educated children who will live a more fulfilling life.
Don't be turned off by the high sticker price at private institutions. Many offer significant financial aid based on need or academic merit, so the actual tuition cost is much less than the sticker price. Each college is required by law to have a "net price calculator" on its website. Plug in your family's financial information to get an estimate of the net price. Also, be sure to take into account the time needed to graduate when comparing prices. If a public institution has a lower net tuition but almost everyone takes five years to graduate, the private institution with a higher four-year graduation rate and net tuition might actually prove less expensive.
While net tuition tells you what college will cost, that is not the same as value. It's difficult to put a price tag on a college education because it's more than that -- it's an experience that has the potential to transform your life, something that may not be entirely appreciated until many years after college.
Another factor to consider: You only get out of college what you put in. If you spend four years partying rather than studying, you can't expect your degree to be worth as much regardless of the college you attend.
Looking at a college or university's retention and graduation rate is critical. Only about half of those who start a four-year college end up getting a degree. Choosing an institution where you can succeed -- and where you will find the necessary resources to succeed -- is critical.
Finally, be careful about the popular notion that a professional degree such as business or engineering will guarantee a better job or lifestyle than a traditional liberal arts college or degree. We no longer live in a world where people hold the same job throughout their lifetime. In fact, many students will hold jobs in 10 years that don't exist now. For that reason, it's more important to learn how to think with rigor and creativity than simply to train for a particular job.