Hard work and the discipline to save are crucial to building up wealth over the course of a lifetime. But one decision is particularly important to success: getting a college degree.
In fact, simply having that sheepskin on your wall typically translates to about a 75% premium in lifetime earnings, according to new research from the Federal Reserve Bank of New York.
In recent years, high school graduates have earned an average of $45,000 annually, the analysis found. By contrast, college graduates have earned much more — an average of $78,000 annually.
Although the benefit of a college degree seems clear, some people might balk at the price tag of attending a four-year university. And indeed, the sticker price of tuition for a bachelor’s degree has more than tripled since the 1970s, according to the Fed.
Yet, the Federal Reserve also found that students typically do not pay full price for their degree. According to a CNN report on the Fed findings:
“While the sticker price continues to go steeply higher, with the average cost of college at $18,000 a year, the price students actually pay after grants and other assistance — or the ‘net price’ — is around $8,000.”
Although a college degree continues to pack an enormous payoff for millions of people, not everyone benefits.
Earlier research from the Fed concluded that a degree does not offer a significant benefit for about 25% of college graduates, with median wages virtually identical to those of high school graduates. According to the Fed:
“Overall, these figures suggest that perhaps a quarter of those who earn a bachelor’s degree pay the costs to attend school but reap little, if any, economic benefit.”
Lowering the cost of college
While college often is expensive, it doesn’t have to be. In fact, some places let you keep your wallet closed while earning a degree. As we have reported:
“Here and there throughout the country are schools where you pay nothing for tuition if you meet certain requirements. There might be work-study involved, but you can save tens of thousands of dollars by attending these schools.”
For a list of these schools, check out “10 Colleges Where Tuition Is Free.”
You’ll also find more great tips by reading:
- “7 Cheaper Paths to a Great College Education“
- “The 25 Colleges With the Best Return on Your Money in 2019“
Do you have tips for cutting the cost of college? Share them in comments below or on our Facebook page.