In recent years, the nonprofit College Board touted the difference in lifetime earnings of college grads over high-school graduates at $800,000, a widely circulated figure. Other estimates topped $1 million. […]
Mark Schneider, a vice president of the American Institutes for Research, a nonprofit research organization based in Washington, calls it “a million-dollar misunderstanding.”
One problem he sees with the estimates: They don’t take into account deductions from income taxes or breaks in employment. Nor do they factor in debt, particularly student debt loads, which have ballooned for both public and private colleges in recent years. In addition, the income data used for the Census estimates is from 1999, when total expenses for tuition and fees at the average four-year private college were $15,518 per year. For the 2009-10 school year, that number has risen to $26,273, and it continues to increase at a rate higher than inflation.
Dr. Schneider estimated the actual lifetime-earnings advantage for college graduates is a mere $279,893 in a report he wrote last year. He included tuition payments and discounted earning streams, putting them into present value. He also used actual salary data for graduates 10 years after they completed their degrees to measure incomes. Even among graduates of top-tier institutions, the earnings came in well below the million-dollar mark, he says.
Wall Street Journal: What’s a Degree Really Worth?
I’m a serious college-skeptic, but here are two important additional considerations:
1) Slack. Are the jobs college graduates get better jobs, regardless of how much they pay? And remember, one person’s slack is another person’s toil. (See: The Case for Working With Your Hands“)
2) Not all majors are created equal. What are the lifetime earning differences between BS and BA degree holders who hold higher degree, for instance?
February 3, 2010 at 2:19 am
My degree led to more enjoyable, higher paying, more-time-off having jobs. I elected to go into a trade and I think that made the difference.
February 3, 2010 at 6:32 pm
I work as a writer and creative director in advertising and I’m not even sure if my last two employers knew I went to college (I have a B.A. in Sociology). My education never came up. They only wanted to see my portfolio of work.
Bottom line: good ideas and imagination are far more important than a degree in my book. And when I interview creatives for writing gigs, I just want to know if they have talent.
June 7, 2010 at 1:07 pm
I earned a degree in English, taught in public school, continued to wait tables during summers, etc.
There are guys who graduated from high school with me, went into a construction trade, welding, carpentry, plumbing, or something, without any degree, and have earned a lot more than I have,
and without the $75k in student loan debts.
By the time I completed my degree and began teaching, at a whopping $30k/yr, many of them were already earning 45 to 50k, having 9 years experience in their trade. (I worked my way through school, without parental financing, so, yes, it took me 9 years to graduate with a BA and teacher certification, since I studied part time for about half of that time, and twice took a year off to work and save to go back to school).
So, financially, the education has NOT paid off, sadly.