There has always been much debate on how valuable a college degree is. Some are convinced it’s a waste of money and time that could have been spent working and earning income. Others say it’s a necessary education experience that will give one a competitive advantage.
A recent study was conducted by the College Board – the same company that creates the SAT – claiming that a college degree’s value is growing, according to an article in The New York Times.
Workers who had college degrees made more money and were more likely to be employed, according to the study, “Education Pays: the Benefits of Higher Education for Individuals and Society.”
Workers who had bachelor’s degrees in 2008 earned a median income of $55,700 in 2008, which was $21,900 more than workers who only had a high school degree. The study also found that in recent years, women aged 25-34 with bachelor’s degrees earned 79 percent more income than those with only high school degrees. Men earned 74 percent more. Compared to 10 years ago, women earned 60 percent more and men earned 54 percent more.
The study also considered the cost effects of student loans and not earning income for the first four years after college. It took college graduates 11 years of working to reach the accumulated wealth level of high school graduates, assuming an average of a 6.8 percent student loan interest.
A college degree helped workers during the recession as well. The unemployment rate for college graduates 25 and older was 4.6 percent and 9.7 percent for high school graduates.
“Consistently over time, unemployment rates are about half for college graduates,” Sandy Baum, an author of the report told The New York Times. “And jobs began recovering for college graduates about a year and half ago. While it’s easy to find a college grad who’s unemployed, you’re statistically much less likely to be in that circumstance if you have a higher level of education.”
The debate has gained steam with the recent spike in tuition costs, which are now rising faster than the rate of inflation. However, most economists agree that a college degree will pay for itself.
“In general, college is a good investment, but there is great variability in outcomes,” Robert Lerman, an economics professor at American University told The New York Times. “A significant minority of college graduates don’t earn as much as those with less education. And all is not lost if you don’t go to college. There are other routes to improving your earnings, for example, credentials that demonstrate mastery of an occupational skill like plumbing.”
The study also found social benefits for acquiring a college degree. People with college degrees are more likely to vote, exercise, volunteer and have health insurance pensions. Also, people with college degrees are less likely to smoke, be obese or have low-birth-weight babies. However, many believe that having a college degree cannot cause these social benefits. There is rather just a strong correlation.