Skipping College? You Just Cost Yourself $800,000

Photo (cc) by axmai

Is it really worth it to go to college? The simple answer: Yes.

According to a new study from the Federal Reserve Bank of San Francisco, earning a college degree is a sound investment for most young people, despite soaring tuition costs and a bleak job market. The report noted:

The benefits of college in terms of higher earnings far outweigh the costs of a degree, measured as tuition plus wages lost while attending school. The average college graduate paying annual tuition of about $20,000 can recoup the costs of schooling by age 40. After that, the difference between earnings continues such that the average college graduate earns over $800,000 more than the average high school graduate by retirement age.

If that’s not enough to make you want to stay in school, I don’t know what is. The report went on to say:

Although there are stories of people who skipped college and achieved financial success, for most Americans the path to higher future earnings involves a four-year college degree. … These findings suggest that redoubling the efforts to make college more accessible would be time and money well spent.

I think the bottom line is that a college degree can pay lifetime dividends if you make wise decisions regarding your degree, what university you attend and how much you’re willing to fork over for tuition. And remember: “There is no definite evidence that [high-cost colleges] produce far superior results for all students,” the report said.

Still, college may not be for everyone. Slate.com said the issue is more complicated than it appears.

To say that college is always worth what it costs oversimplifies the issue. The college-grad earnings premium has grown recently more because wages for high school grads have stagnated than because pay for college grads is on the rise. A PayScale ranking of America’s colleges and universities done earlier this year also identified almost two dozen schools that actually make their students poorer.

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