With the fall semester of colleges across the country officially in swing, much has been made about ballooning student debt, rising costs, and the questionable job prospects for recent graduates.
But that misses one critically important thing Americans need to know: The true benefits of college have only grown.
The remarkable benefits
In a series exploring the debate surrounding a college education, the Federal Reserve Bank of New York provided a fascinating post that examines the true value of a higher-education degree.
It examined all the underlying data surrounding the actual costs of earning a degree, which of course include tuition and fees, but also lost wages by going to classes instead of working. And it then determined the expected earnings of someone with a bachelor's degree versus a high school degree for the 40 years after graduation.
What was the ultimate result? Authors Jaison Abel and Richard Deitz found: "Despite what appears to be a set of alarming trends, the value of a bachelor's degree for the average graduate has held near its all-time high of about $300,000 for more than a decade."
And as you can see in the chart below, the study showed:
The authors went on to say:
We estimate that the value of a college degree fell from about $120,000 in the early 1970s to about $80,000 in the early 1980s, before more than tripling to nearly $300,000 by the late 1990s, where it has remained, more or less, ever since. Despite drifting down somewhat in the aftermath of the Great Recession, the value of a bachelor's degree has remained near its all-time high.
In an even more stunning point, the authors found -- what many have failed to mention in taking on this issue -- that although the costs of college are rising, the time it takes to a student to recover those expenses and earn a positive return on that investment plummeted in the 1980s and has remained basically steady since:
We often hear questions surrounding the true benefits of college. Many of them are appropriate. However, the Pew Research Center, in a study appropriately titled "The Rising Cost of Not Going to College," revealed how the salary gap between those with and without a degree has widened through successive generations:
Is this all to say American youths should blindly pursue college degrees? Absolutely not.
PayScale reported that there are far too many schools -- nearly 60, to be exact -- in which students actually might lose money as a result of paying tuition for a degree that doesn't actually pay off.
But by and large, all the evidence points to the fact that the one thing more expensive than a degree is not having one. This data from the Federal Reserve is one more bit of proof to remember.
