Education Beyond High School Pays Off


by Lisa Thompson

Study after study has shown that on average, the more education you have, the higher your income is likely to be. And, according to one study, 70 percent of jobs in Minnesota (269KB, .pdf) will require some training beyond high school by 2018. So getting more education seems like a no-brainer. Yet, if you factor in the cost to get that training or degree, is it still worth it? A recent report released by the Pew Research Center attempts to answer that question.

 

What a Degree Gets You vs. High School Diploma

The good news is that, yes, the average college grad will earn more than their high school counterpart during their career.  For a two-year college grad, the report estimates a $163,000 difference between their earnings and that of a high school grad. For those with a four-year degree, that gap increases to $550,000 over a lifetime.  These numbers factor in the cost of the education (tuition only at a public college or university) and the lost income for the time spent in school. However, the numbers would increase or decrease depending on:

 

  •  the actual cost of the college attended
  •  how much financial aid the student received
  • the length of time it took to complete the degree
  •  the actual wages over a lifetime

 

To see an earnings comparison for those with graduate degrees, visit the Pew Research Center website.

 

Education Affects Unemployment

But besides income differences, education can benefit you in other ways. The more education you have, the less likely you are to be unemployed:

 

Level of education

Median* weekly earnings in 2010

Unemployment rate in 2010

Some high school, no diploma

$444

14.9%

High school graduate

$626

10.3%

Some college, no degree

$712

9.2%

Associate degree

$767

7.0%

Bachelor's degree

$1,038

5.4%

Master's degree

$1,272

4.0%

Professional degree

$1,610

2.4%

Doctoral degree

$1,550

1.9%

*Half of all workers earn more than this; half earn less.

Source: U.S. Bureau of Labor Statistics

 

And this is an important point because unemployment can affect the income gap between high school and college graduates. While reports such as the Pew report try to account for this, lingering economic downturns like the one we’ve been in can increase that number further since those with a high school diploma or less are experiencing the highest amount of and most prolonged unemployment.

 

Also, not all college majors are created equal when it comes to earning potential. For example, those with bachelor’s degrees in high-demand or technical fields (like computer and engineering) tend to have a higher rate of return than other programs like education or liberal arts.

 

It’s About More Than Income

Going to college and getting a degree, certificate, and diploma isn’t just about the income you can earn.  There are many other benefits. You may have better employee benefits and working conditions.

The Pew report also stated that college graduates tend to be happier with their jobs and their financial situation.

 

Education Is Valued, But Cost Is a Concern

Affordability remains a huge stumbling block with 75 percent of those surveyed for the report saying that college is not affordable for the average person. Yet, 74 percent saw a college degree as necessary to get ahead. Among college graduates, 86 percent believe it was a good investment. This compares with 84 percent of current college students who say the same thing.

 

A Balancing Act

When reviewing reports like this one, keep in mind that the numbers are based on averages, and averages only reveal what’s typical in an overall sense. They’re not set in stone. You have control over your own career path. If you do your research and carefully plan out your career, you could easily do better than the “typical” person reflected in this study.

 

Also remember that there is more to getting an education than just the income you earn. And there is no one-size-fits-all approach. Different students have different needs and goals. And different career paths require different types of education.

 

As you consider your educational goals, it’s important that you find a balance between those things that are most important to you. At the end of the day, only you can decide whether or not your college education—including the time and money you invested in it—was truly worth it.

 

2 thoughts on “Education Beyond High School Pays Off

  1. jaredreise January 20, 2015 / 3:55 pm

    Or in the words of the late great Casey Kasem– “Keep your feet on the ground, but keep reaching for the stars!”

    Like

  2. Emma January 19, 2015 / 10:29 pm

    As a graduate student I often struggle with the uncertainty of future employment and wonder whether or not my continuing education will in fact pay off in the end. I liked this post because it is a good reminder that my future financial situation should not be the only driving force in my decision of whether or not to pursue an advanced degree. While statistics provide good information on the future job outlook of my career, I have the power to create my own career path that meets my needs and goals.

    Like

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