Are College Tuition Fees Still Worth It? Let’s Look At The Lifetime Payoff

College tuition is expensive, but does is pay off over time? Let’s take a close look at the data.

Tuition fees for top colleges are not getting any cheaper, and Gen Z have taken over the woes of the Millennials who came before them, complaining that college debt, combined with the rising cost of living, means they’ll never be able to buy a property or even just have a nice life.

Given that we now live in a world where you can learn to do almost anything online, from running your own business to writing code, is a college education still a good long-term investment.

It’s true that education-related debt is significant for most graduating students, but so is the lifetime payoff of a college education. Here’s what you need to know.

• The average federal student loan debt in the U.S. is about $37,850, and to be fair it has almost tripled in the last 15 years.
• Over a lifetime, workers with a bachelor’s degree earn over a million dollars more on average, compared to those who only have a high school diploma.
• The highest earning college graduates earn more than two million dollars more than the highest earning high school graduates.
• Those with a Masters can expect around half a million more than those with just a Bachelors.
• Unemployment rates are nearly twice as high for high school graduates compared to those who graduated college.
• Many of the fastest growing jobs require at least a bachelor’s degree, if not a Masters.

If you’re already thinking about your second cousin with her Masters in liberal arts who earns less than you do with your high school education, that’s fair enough. Just be aware that you’re falling victim to what psychologists call the belief in the law of small numbers.

There will always be a small number of exceptions, but the data doesn’t lie. On average the difference in earning between high school and college graduates is real, and significant.

Be Aware of Nuance

The data doesn’t lie, but it is nuanced. The average graduate with an engineering degree earns more than a graduate with a fine arts degree.

Someone with a very practical and focused associates degree – or simply a very practical and focused non-degree career path – can earn more than someone with a Bachelor’s, or even a Masters, in a soft subject with no direct career path attached to it.

The best entry level jobs, whether out of high school or college, tend to go to those who have carefully built a resume with the right extra-curriculars, volunteer activitie and work experience. This has always been the case, and is probably more so since there has been a significant climb in the number of students attending college.

There are still differences in earning power, based on gender, race and other factors, as well as where you live, where you work, and how much sacrifice you’re willing to make. There are also differences based on ability, skill set, and areas of interest and specialization.

The numbers, however, speak loud and clear. College graduates, on average, earn more than those without a degree, and the difference is significant. Most importantly, perhaps, over a lifetime the difference is a lot more than the current cost of tuition fees, even when you factor in paying them off, with interest.

A Final Caveat

Does this mean college is for everyone? Not necessarily. In fact, that’s not the takeaway I want to leave you with.

If you’re skipping college, however, it helps to have a plan. There are well-paid jobs for those without a degree, and poorly paid jobs only available to those who have one.

Having a plan for your career is probably the best route to reaching the income you need and designing a life you love. That, and being honest with yourself. If you’re planning on skipping college based on the fact that it’s ‘just not worth it’, it might be time to crunch the numbers and assess whether that’s actually true for you or not.