With hefty deposits for college tuition due this month, the Bank of Mom and Dad may be feeling the pinch. Delighted as parents were when their graduating seniors opened up fat envelopes last month, they may now be eyeing their bank balances with dismay. The latest news from the Labor Department should help ease the pain: the unemployment rate for college grads in April was a reassuring 3.9 percent, compared with 7.5 percent for the work force as a whole.
No question that many parents today are appalled at the high cost of sending their kids to college, and with good reason. Since 1970 the cost of college has risen four times faster than the cost of everything else. Many small colleges and elite Big U's cost about $50,000 a year for tuition, fees, room, and board -- $200,000 over four years -- and of course the grand total goes up if it takes five or six years, which it often does these days. And what if parents have two or three kids? At that price they can kiss the summer house on the lake goodbye, and they'd better not plan on retiring early, either.
Of course, a college education need not cost that much. The 50K per year figure is only for the most expensive schools, and only for the minority of families that receive no financial aid. State universities are still a relatively good deal, usually costing about half as much. And community colleges are an unheralded treasure of American society, a place where students can get two years of education and training for very little money and obtain a credential in a field like computer science or nursing that is likely to lead to a well-paying job. Nevertheless, many parents and students face a formidable tab for four or more years of a college education. Even at a state U, college costs add up. If it costs $25,000 a year over five years, a pretty typical path for college students, that makes $125,000 for a bachelor's degree. Does it pay off in the long run?
The answer is an unambiguous yes. Even with the rise in college participation in recent decades, only 30 percent of Americans ages 25-29 have a four-year degree. In today's information-based economy, a college education is more important than ever to prepare for the best new jobs. The economic benefit of a four-year degree amounts to about a million dollars over the course of a career, according to most estimates. As the recent Labor Department statistics confirm, the unemployment rate is consistently at least twice as high for 25 to 29-year-olds with only a high school degree than it is for those who have a four-year college degree.
All of a sudden that $125,000 investment looks like a pretty good deal after all. And most college grads know it. A 2010 survey by the Pew Research Center found that 84 percent of them said that their degree had been a good investment; only 7 percent said it had not. In today's sluggish economy it may take a while to find a good job after graduating, but a college education nearly always pays off over the course of a career.
And there is more to a college education than the economic payoff. A four-year college degree provides a broad general education that enhances a person's life in multiple ways. Education researchers Ernest Pascarella and Patrick Terenzini report a variety of intellectual benefits from attending college, but also personal and social benefits, such as clarifying values and becoming more confident socially. All these advantages hold up even after taking into account characteristics such as age, gender, and family social class background.
What about the choice between an "elite" school and a state school? Will that choice matter in the long run? Here the answer seems to be no. Research that controls for students' abilities when they enter college -- SAT scores and class rank -- finds little economic benefit to paying the exorbitant costs of an elite school. Also, a 2010 study published in Journal of Labor Research reported that graduates of elite schools actually have lower job satisfaction than grads of state schools, a decade later, perhaps because their expectations were higher.
For families, the bottom line seems to be this: help your kid get into college; help your kid stay in college; and keep supporting your kid through the twists and turns that may be in store before graduation. But don't expend too much angst over whether the degree will be from Elite U or Ordinary State U. In the long run, having a college degree matters, but qualities like intelligence, persistence, and luck will matter more to adult success than where the degree was from.
Jeffrey Jensen Arnett, Ph.D., Clark University professor of psychology and Elizabeth Fishel, author of four nonfiction books about families, are the authors of the new book, When Will My Grown-Up Kid Grow Up? Loving and Understanding Your Emerging Adult.