Does it Still Pay to Have a College Degree?

Remember when people told you that if you went to college you would earn $1 million more over your working life than if you didn’t?

I’m not sure anyone really believed that, but if they did and it steered them toward attaining a college degree, we should be happy. A college degree shouldn’t be subjected to a cost-analysis, because the education you get is going to serve you in many non-monetary ways during your lifetime. Still, because college tuition costs have climbed so high today, it’s easy to see why people want some sort of analytics to determine if a degree is worth the investment.

A new report, “One Degree of Separation,” finds that young people may be discouraged from even going to college because they don’t know how to finance their education. The survey, funded by the Bill & Melinda Gates Foundation, reports that 70 percent of high school graduates don’t even know how to apply for federal financial aid or scholarships.

That bit of information is crucial to many students continuing their education, the study says. In addition, the study finds that only 37 percent of high school graduates believe a college education is worthwhile, even if they borrow to pay for it, while 54 percent of college graduates think it is a wise investment.

“There’s a jarring gap in optimism between young people who have a college degree in today’s economy and those who don’t,” said Jean Johnson, author of the study. “Even more disturbing, young people who don’t get a credential beyond high school face a trifecta of barriers: They’re more likely to come from poorer, less-educated families; they lack basic knowledge about the higher education system and employers; and many aren’t convinced a college degree will pay off for them, especially if they need to borrow to get it.”

Today less than half of those entering four-year colleges complete a degree within six years, according to federal statistics. And, only 20 percent pursuing a two-year degree at a community college are able to accomplish that task within three years.

Still, a college education is the single most crucial component to position yourself for a successful work life. We all can point to examples of entrepreneurs or sports figures who made millions – even billions – of dollars without a college education. But we have to realize they are the exceptions.

Just for the record, the National Association of Colleges and Employers in Bethlehem, Pennsylvania reports that 2011 college graduates are receiving a starting salary of $51,171 when they find jobs. That’s about a six percent increase over a year ago.

Obviously, not every college graduate earns that much – some earn much less and others more – but it does put these individuals in the top 50 percent of all wage earners today. And, that’s only at the start of their work lives.

Again, analytics aren’t going to guarantee you that a college degree will lead to a successful career, but it gives you the best opportunity to earn financial stability in a world that is making it harder and harder to survive without an education.