If you’re looking to change careers or start a new career, you’ve probably considered heading back to school. But with college tuitions expanding and job markets shrinking, you wonder: is it really worth it? The latest research sheds some light on the tough questions that you should ask before heading back to school.
Many high school guidance counselors may tell you that a college education is worth about $1 million over the course of a working life. While that may have once been the case, a recent study by Skidmore economist Sandy Baum and the College Board estimates the real value of a college degree at about $300,000. While the drop in value is significant, there are good reasons.
According to Baum’s research, college graduates on average earn $20,000 more annually than workers with only high school diplomas. Over a forty-year career, that adds up to about $800,000. Since that figure represents lifetime earnings, an adjustment for inflation brings the figure down to about $450,000. Finally, the cost of tuition and books at a public university ($30,000 if you don’t qualify for any financial aid or scholarships) drops the figure to $300,000.
If the numbers look grim, don’t throw up your hands just yet. Despite the gap between the older and newer appraisals, a college degree may still be one of the wisest investments you can make.
Although you may not end up earning the $50,000 annual salary (according to Baum’s research, the average for graduates of bachelor’s degree programs), you may find additional benefits that offset your costs. Bachelor’s degree holders are more likely to land a job with health insurance–a valuable commodity with rising healthcare costs.
Also, because the job market places such importance on college education, you may have an easier time finding and holding a job with a degree than without. According to the U.S. Bureau of Labor Statistics, the unemployment rate among students with a bachelor’s degree stood at 2.2 percent in 2007–compared to 3 percent for associate’s degree-holders and 4.4 percent for those who only have a high school diploma.
If your career aspirations include advanced degrees (in business, law, or medicine, for example), holding a bachelor’s degree is usually the first step to more advanced education, which can mean significantly higher earnings.
Benefits of Not Earning a College Degree
While research suggests college education is important, it would be unwise to bill a college degree as the golden ticket to success–Bill Gates is a shining example of what one college dropout can achieve. The most obvious benefit of bypassing college degree is avoiding the expense. By starting a career right away, you could be $30,000 richer in the immediate term. Many potentially lucrative careers offer paid on-the-job training and apprenticeships, resulting in pay comparable to the average for bachelor’s degree holders. A radiological technician, for example, can land a job with a two-year associate’s degree. According to the BLS, in May 2007, median annual earnings for radiologists and radiologic technicians were $50,260, right in line with the average for bachelor’s degree holders.
Does the Student Make the Degree?
The old argument continues: nature versus nurture. Although some argue that the degree-holder and not the degree, makes the success, recent research suggests that education still plays a significant roll in lifetime earnings. If you maintain that the person who makes the difference between a wise educational investment and a poor one, there are certain trends that can help you make a better return on your investment. For example, students in math, science, and career-related courses tend to make more than art and humanities students.
Even more important than your choice of major, your choice of school can also affect your post-graduation earnings potential. On average, graduates of higher-ranked colleges and colleges with tougher selection standards for potential students earn more than graduates of lower-ranked schools. If you’re curious about where your school ranks, check their federal accreditation (available through the U.S. Department of Education), or check it’s score on the National Survey of Student Engagement or the Collegiate Learning Assessment.
Of course, when you’re deciding whether school is right, it’s tougher to decide which school is right. Setting aside concerns about the economy and the rate of inflation, what you get out of your degree may likely depend on what you put into it. After all, if you take into account the value of experience, broadened horizons, and the opportunity to explore what interests you, the value of a college education may ultimately prove beyond estimation.