Higher Education ROI

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In recent years ballooning student debt and school costs have led many to question whether higher education is a good investment. While college and grad school do cost a lot, it’s the return on investment that future students should be focusing on. Contrary to discussions focusing on costs, the price of not obtaining a post-secondary degree has never been higher.

College has become 12x more expensive in one generation:[1]
You could send 12 kids to college in 1978
For what you can send 1 child to college with today.

While the price of housing and medicine seems to have skyrocketed, it’s really education that costs a ton more.

With your average student spending:

College type || tuition and fees || total including room and board
Public two-year in-state || $3,264 || $10,730
Public Four-Year In-State || $8,893 || $18,391
Public Four-Year Out-of-State || $22,203 || $31,701
Private Nonprofit Four-Year || $30,094 || $40,917

Factoring in financial aid:

Cost vs. Financial Aid
[school type|| avg cost || avg total aid || net tuition
Public 2-year || $3,264 || $4,810 || -$1,550
Public 4-year || $8,893 || $5,770 || $3,123
Private 4-year || $30,094 ||$17,630 || $12,464

Or average four year costs of:
Public 2-year:-$3,100
Public 4-year: $12,492
Private 4-year: $49,856

Not including room and board.

7/10 college students borrow to deal with the cost:
With Average debt at graduation for borrowers growing
2008: $23,287
2009: $24,684
2010: $26,165
2011: $27,735
2012: $29,400

It’s a large investment. What’s the return?

ROI: Return on Investment

Higher education has paid off in elevated earnings, particularly since 1996[6]

Median Adjusted Household Income of Households headed by 25 to 34 year-olds
[level of education, earnings per month by year]

Professional & Doctorate:
1984: $6,946
2009: $10,382

Master’s:
1984: $7,074
2009: $8,618

Bachelor’s:
1984: $5,960
2009: $7,232

Associate’s:
1984: $5,075
2009: $4,841

Some College:
1984: $4,302
2009: $3,937

High School:
1984: $3,587
2009: $3,067

(All in 2012 dollars)

Leading to the median earnings for full-time year-round workers 25+ in age[8]

Professional Degree (2%): $102,200
Doctoral Degree (2%): $91,000
Master’s Degree (10%): $70,000
Bachelor’s Degree (25%):$56,500
Associate’s Degree (11%): $44,800
Some College (17%): $40,000
High School Diploma (27%): $35,400
Less Than High School (7%): $25,100

And millions in additional lifetime earnings:
Lifetime earnings:[9]
High school diploma: $1.2 million
Bachelor’s Degree: $2.1 million
Master’s Degree: $2.5 million
Doctoral Degree: $3.4 million
Professional Degree: $4.4 million

This depends some on major[7]

Mean monthly earnings of bachelor’s degree holders by major:
Business: $5,843
Computers: $6,743
Engineering: $7,106
Liberal arts: $5,017
Social science, law: $4,810
Natural science, medicine: $4,956
Education: $3,806
Average: $5,446

But almost all grad schools are good investments. [9]

Boosting your earnings by this much per year…[7]

Business: $36,072
Computers: $15,948
Engineering: $13,380
Liberal Arts: $8,688
Social science, law: $8,076
Natural science, medicine: $23,100
Education: $14,556
Average: $15,432

As well as the intangibles

Prestige
Greater Understanding
Fulfillment
Greater responsibility

Higher education is expensive, but it’s an investment. One that can change your life.

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