Is It Really Worth It?

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In light of the discouraging news we read and hear about the rising cost of a college education, student debt, and dismal job prospects for grads – this was an encouraging report published by the Federal Reserve Bank of San Francisco last week.

Is It Still Worth Going to College?

Mary C. Daly and Leila Bengali

Media accounts documenting the rising cost of a college education and relatively bleak job prospects for new college graduates have raised questions about whether a four-year college degree is still the right path for the average American. In this Economic Letter, we examine whether going to college remains a worthwhile investment. Using U.S. survey data, we compare annual labor earnings of college graduates with those of individuals with only a high school diploma. The data show college graduates outearn their high school counterparts as much as in past decades. Comparing the earnings benefits of college with the costs of attending a four-year program, we find that college is still worth it. This means that, for the average student, tuition costs for the majority of college education opportunities in the United States can be recouped by age 40, after which college graduates continue to earn a return on their investment in the form of higher lifetime wages.

Click here to read the full report.