Tuition costs are skyrocketing, student debt is soaring and it's extremely difficult for college grads to find good jobs. And yet, a four-year degree has never been more worth it, according to a new study.
People with bachelor's degrees make around $300,000 more over their lifetimes than those with just a high school education, according to a new analysis by Jaison R. Abel and Richard Deitz of the Federal Reserve Bank of New York. That's more than triple the value of the degree in 1980, when college grads earned about $80,000 more than those with just high school degrees, the researchers found.
In fact, the value of a bachelor's degree has actually remained around an all-time high for over a decade:
Abel and Deitz wrote that despite the "alarming trends" of tuition cost hikes and student debt loads, it still makes sense for most Americans to attend college.
The value of the degree peaked in the late 1990s, and took some hits during the financial crisis and recession, the researchers found. But when comparing the average wage of college graduates to the average wage of those with only a high school diploma, a distinction was clear. The "net present value" of a college degree -- i.e. the extra wages a person earns for having a degree, minus the cost and time of going to college -- has hovered around $300,000 for more than one decade.
The researchers attributed the gap largely to the fact that wages for workers with high school educations have decreased dramatically, widening the income gap between these workers and more educated ones.
It is also taking Americans far less time to recoup the costs of going to college than it did several decades ago. It took graduates an average of 25 years to make up for the costs of getting a bachelor's degree in the late 1970s, the researchers said. Today it takes on average 10 years.
College may not be the ideal choice for some people, and these figures represent the averages for all graduates. But by and large, the report shows that college is still a worthwhile investment -- Zuckerbergs of the world be damned.
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