There’s no such thing as a standard recipe for financial or career success. But if there were, a college education would probably be the key ingredient.
According to a 2014 Pew Research Center study, as reported by NPR:
Those with a college degree now make $17,500 more per year than those without — a wage gap that’s doubled in recent decades. Those without a degree are four times more likely to be unemployed.
Another study, published in 2011, found that, “People with a bachelor’s degree make 84 percent more over a lifetime than high school graduates.”
So choosing to go to college is a no-brainer, right?
Not so fast. With the cost of college having risen by about 260 percent over the past 37 years — a change from $37,752 to $95,488 over four years, including tuition, room and board, and fees — and total U.S. student debt topping $1 trillion — with the average college student graduating with almost $30K in student loans — many debt-ridden college graduates walk away from college wondering if their degree was worth it at all.
Despite the skyrocketing cost of a four-year college degree, the answer is still a firm yes.
As Paul Taylor, executive vice president of special projects at Pew, said, “In a modern, knowledge-based economy, the only thing more expensive than going to college is not going to college.”
Not All Degrees Are Created Equal
But, as evidenced by PayScale’s College Return on Investment (ROI) Report, not all college degrees hold equal value. A bachelor’s degree in economics from Harvard will likely earn you significantly more over the course of your career than, say, a bachelor’s degree in psychology from the University of Southern Mississippi.
By pointing this out, we’re not denigrating “Southern Miss.” The school is well-respected for its British studies program and its fine arts program, and it consistently sends one of the highest numbers of students to study abroad of any school in America. All impressive attributes.
Nor are we saying that college students should seek out only the most financially valuable degrees. Money can’t buy happiness, and we believe students should study subjects they’re passionate about.
The point we’re trying to make is that if, like many prospective college students, you plan to take out a loan to pay for college, before you sign on the dotted line you’d be smart to choose a school and a course of study that will allow you to comfortably repay that loan after you graduate.
And that’s where PayScale’s College ROI Report comes in.
College Is an Investment
No matter how you look at it, college is an investment — of both time and money. Yes, the benefits of college surpass solely financial gain; they include learning how to think critically and solve problems, gaining self-confidence, and generally figuring out how to “adult.”
But when it comes to post-graduation financial comfort — let alone financial security — the economic aspects of evaluating college return on investment (ROI) shouldn’t be ignored. The truth is, some schools provide a higher return on investment than others, and certain school and major combinations actually see a negative return on investment. Regardless of whether you’re planning to study computer science or psychology, earning potential in your chosen field, compared with the cost of attendance for the colleges and universities you’re considering, should be part of the equation when you’re deciding where you want to go to school.
To that end, PayScale’s College ROI Report provides the ability to view the best value colleges for various majors and career paths by evaluating ROI—for both in-state and out-of-state students—at 1,422 different schools. Our report allows prospective college students to see which schools provide the best monetary return for their alumni via low cost of attendance, high earning potential or a combination of the two.
Look before you leap; make an informed decision before you take on a huge student loan. If you’re confident you’ll be able to pay it back after you graduate, the only thing keeping you up during your college years will be those all-night study sessions … and, OK, maybe the occasional kegger.
Click here to explore PayScale’s College Return on Investment Report.
Tell Us What You Think
Are you repaying student loans? In retrospect, would you have chosen your school or major differently based on your ability to repay those loans? We want to hear from you. Tell us your thoughts in the comments or join the conversation on Twitter.
Featured Image: RomoloTavani/Getty Images
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