With the rising costs of higher education, there is debate over whether the investment in a college degree still yields positive returns. However, studies show that higher education remains a worthwhile investment. College graduates have higher earning potential and lower unemployment rates over their lifetimes compared to those with only a high school degree. Education develops valuable hard and soft skills that make graduates more employable. While student debt is a concern, college graduates are able to pay off loans at a manageable pace in most cases. Overall, the net financial return and career prospects make higher education a sound investment.
College boosts earning potential
On average, college graduates earn about $30,000 more per year than high school graduates. Over a 40-year career, this amounts to over $1 million in additional lifetime earnings. Even after deducting the costs of college tuition and lost earnings during schooling, the net financial return on a 4-year degree is substantial at over $300,000. Higher levels of education lead to higher pay as graduates have more advanced skills and knowledge that employers value.
College sharpens employability
A college degree indicates certain competencies to employers. Coursework builds critical thinking, communication, teamwork and other soft skills. Majors teach occupational skills directly relevant to certain careers. Therefore, college graduates have higher employment rates. In May 2020, unemployment was 2.2% for adults with a bachelor’s degree versus 6.5% for high school graduates. Education credentials signal productivity, ability and trainability.
Student loans are manageable
average student debt is around $30,000. While not negligible, standard 10-year repayment plans make this affordable. The typical monthly payment is $300-400. This represents a reasonable percentage of a graduate’s monthly income. Also, incomes tend to rise over time while loan payments stay fixed. Those facing financial hardship can access deferment, forbearance and income-driven plans. Default rates are quite low. Most borrowers successfully repay their student loans.
In sum, higher education remains a worthwhile investment given the substantially higher lifetime earnings and superior employment outcomes. College drives professional success.