College graduates have higher earning power. This is a well-established fact. But it is also well established that college can cost an absolute fortune, that the job market is in a serious state of transformation, and that the labor landscape is more saturated than ever before with college graduates just like you.
So how can it possibly make sense to shell out tens of thousands, or even hundreds of thousands of dollars, for a four year degree? Do college grads really enjoy enough advantages in the labor market to justify the rising cost of tuition? When you take everything into account, is a degree really a sound investment?
These are questions that many American families are asking today. Once upon a time, college was an opportunity to be seized. Those who were fortunate enough to do so never had to ask the big question, the one we’re all asking today:
Is college really worth it?
Short answer–yes. College is worth it. There’s tons of evidence to back the claim. But as always, there are some things to consider first.
One thing you should consider is building credit while you’re still in school. Check our list of the best credit cards for college students. Or read on to learn more…
Some Things to Consider First
Higher education has gotten a bad rap lately. And frankly, a lot of this is well-deserved.
Over the last 20 years, the cost of college has outpaced…pretty much everything, including America’s rate of inflation. The average year of tuition at a public, four-year in state college was $4,202 in 2003.
According to the Bureau of Labor Statistics inflation calculator, that would be $6,918 today. In reality? The average cost of tuition to attend a public school in your home state was $11,541.
Over the past decade, we have seen the cost of a college degree rise precipitously. According to U.S. News and World Report, the cost of a four year degree from a private university jumped by 134% over the last 20 years. Over that same period, out of state students saw a 141% rise in the cost to attend a public institution. And perhaps most troubling, in-state residents saw the highest spike in cost, paying 171% more to attend a public institution in 2023 than did their counterparts in 2003.
It costs substantially more to attend college today than it did even for those from a generation ago. America’s seemingly insurmountable student loan debt crisis tells the same story.
College Investor points out that the median monthly student loan payment is roughly $222. This number, however, does not reflect the true student loan debt held collectively by America’s students. With more than $1.7 trillion owed to the Federal Reserve Bank, some 38% of survey respondents indicated that they had one or more loans currently in deferment for financial hardship.
So obviously, when it comes to the value of a college degree and the cost of living in America, the math isn’t as easy as it used to be.
It has also cast a glaring spotlight on postsecondary education, challenging our assumptions about the inherent value of pursuing a bachelor’s degree. Add to all of that the impact of inflation on the cost of food, housing, and other amenities, and it makes sense to wonder whether you really are getting your money’s worth out of a college degree.
[Jump to our article about how inflation is impacting everyday consumers.]
Bachelors Earn More
In no uncertain terms, college graduates earn more money than their counterparts with just a high school diploma. The Bureau of Labor Statistics notes that the median income for college degree holders is considerably higher than that of workers whose highest level of education is a high school diploma.
According to the Bureau’s Current Population Survey, the median weekly earnings for Americans 25 and up with a high school diploma was $809 in 2021. Those with an associate’s degree earned $963 per week. And those with a bachelor’s degree earned $1334 a week.
Of course, that only tells part of the story. While the typical earnings for college graduates are higher than those for high school graduates, the factors cited above, like the high cost of college and student loan debt, may cloud the answer a bit.
While college graduates earn more, they also owe more.
Some rough number crunching says that college graduates still earn a wage premium, even when factoring in the monthly expense of student loan repayment. However, this expense is important to consider when anticipating the median earnings in your field.
But here’s the good news no matter what you major in. There’s more to the value of a college degree than just the wage premium…and we don’t mean intrinsically. Sure, personal enrichment is great. But we’re talking dollars and cents here. Below, we’ll tell you ten ways that earning a bachelor’s degree will more than likely improve your earning power today and into the future.
10 Reasons a College Education Will Improve Your Earning Potential
1. Many jobs require a college degree as a minimum threshold.
It’s not just that college graduates earn more. Perhaps even more importantly, college graduates simply have access to more high paying job opportunities. Many top jobs in high growth fields like business management, computer science, healthcare, engineering, teaching, law, and more require a college degree at a minimum.
In fact, says the Bureau of Labor Statistics, more than half of all jobs required some level of college diploma or degree in 2001. In other words, the larger portion of the U.S. job market is composed of jobs that demand some level of post secondary education.
This suggests that earning a bachelor’s degree isn’t just about improving your earning potential. It’s really about widening your access to top jobs. Naturally, stronger earning power comes from landing these jobs. But the real point is that the bachelor’s degree will be the minimum threshold even for many entry-level roles in a number of desirable fields.
2. College graduates develop 21st Century workplace skills.
Whatever field you enter into, a college education carries the benefit of…well…an education. Succeeding in college will require you to develop, use and sharpen certain skills including written and verbal communication, research, organization, collaboration, creativity and more.
These are skills that apply in all work settings. One reason that employers often prefer those with a college degree is because it demonstrates that you have taken the time to strengthen these skills. This enhances your value as an employee and as a member of a broader organization.
A college degree also demonstrates the type of discipline, independence, and determination required for leadership opportunities. This is especially true if you hope to start your own business. Going to college is about more than a degree. It’s also about exercising the learning skills you’ll require to earn that degree. One day, you’ll make these skills into a value-add for your organization.
[Your chosen industry plays a big part in your earnings and job security too! To learn more, check out our list of 10 Recession Proof jobs.]
3. Attending college can help you build valuable connections.
Speaking of things you’ll do on the way to your degree, don’t forget to make friends, build connections, and network like your future depends on it…because it kind of does. As they say, it’s not what you know but who you know.
Well, going to college may give you the chance to know all kinds of cool, interesting, and influential people. From the bright classmates who could be your future business collaborators to the brilliant professors who can help guide you in the first steps of your career; from the talented researchers who conduct their studies at your university to the illustrious alumni who now hold positions of leadership in their field—going to college opens a portal to an extended community of thinkers, influencers, and industry leaders.
Make sure you take advantage of your place in this community. Great personal and professional relationships are often born and nurtured in the lecture halls, dorms and, yes, even the fraternities and sororities that typify a four year college.
4. College degree holders receive specialized career training.
In the most practical terms, pursuing a college degree allows you to choose a major in a specific area of focus. This gives you the power to choose a field with high growth, a strong salary range, opportunities for advancement, and more.
As a college student, you can narrow your educational focus to an area like business, computer science, engineering, education, media, social services, healthcare, and countless others. Moreover, within each of these fields, you have the opportunity to choose a specialization that could qualify you for more jobs in your industry or possibly distinguish you from others in a saturated job market.
This makes college more than just an educational experience. It also marks the starting point in the pursuit of your career goals. If earning potential is one of your top considerations, college makes it possible to choose a major based on the expected pay in a given field. Of course, it’s important to remember that there’s far more to a great job than salary. It’s even more important to love what you do. After all, you’ll be doing it every day.
That said, keep your future goals in mind as you choose a major. This is a chance to begin building the field-specific knowledge and skills that you’ll actually be using on the job some day. It also gives you a chance to manage your salary expectations and invest in college accordingly.
5. College students have access to career prep services.
Not only will you receive career training specific to your field, but many colleges also give you direct access to a wide range of support resources. If you use these resources wisely, they can help you jump-start a great career.
For one thing, the vast majority of colleges and universities provide access to an array of guidance counselors including both academic and career advisors. Be sure to consult with your advisors and make use of all campus support resources.
This may also include job fairs, resume writing workshops, and perhaps most importantly, access to internships and externships in your field. This means that college students have the unique opportunity to begin gaining real world experiences while still pursuing a degree. This is especially noteworthy because many college graduates will even transition directly from their internship into a full-time working role with the employer in question.
6. College gives students a chance to explore different career paths.
We recognize that not every student enters college with a clear sense of their career goals. In fact, this is one of the reasons that college is such a valuable experience for many students. This is a great way to explore various fields of study before settling on the right career for you.
It also spotlights the value of a liberal arts education. As an undergraduate, you have a unique type of freedom. You can learn whatever you want! Take humanities courses on Renaissance literature. Try a few core courses in computer science. Use your electives to study photography. You may use all of these skills or none of them in your future career.
The important thing is that you have the chance to sample all kinds of experiences during your time in college. Find out what you like and what you don’t like. If you take a few engineering courses and realize you actually hate math, you can probably rule out becoming an engineer. Obviously, it’s much better to figure it out now, as opposed to realizing it on your first day of work.
Think of college as a buffet. Sample anything that looks good to you. After all, you’re paying the same rate no matter what you put on your plate. Get your money’s worth in sheer variety. It will significantly reduce the risk of starting down the wrong career path. That type of misstep could seriously delay your progress and stagger your earning potential.
7. Bachelor’s Degree holders fare better in recessions than high school graduates.
The Bureau of Labor Statistics notes that one of the most readily demonstrated benefits of a college degree is job security. This benefit was only magnified in the wake of the pandemic. While the public health crisis ballooned into a major economic crisis, spikes in the unemployment rate disproportionately impacted those without a college degree.
2021 saw a gradual reversal in unemployment trends. The job market experienced steady recovery without yet returning to pre-pandemic levels. During this post-crisis period, those with a bachelor’s degree reported a 3.5% unemployment level. At nearly double that rate, high school graduates saw a 6.2% rate of unemployment. The number was 8.3% for those with less than a high school diploma.
This does underscore the clear economic value of completing high school. But it also shows that the margin of job security improvement is far greater for those who continue into, and complete, a four year college education.
The COVID-19 pandemic proved that you simply can’t predict the challenges that lay ahead. But it was also a clear demonstration that earning a college degree can provide the type of skills, credentials, and flexibility needed to weather this uncertainty.
[Check out 10 more recession proof jobs in the time of economic uncertainty.]
8. It’s still possible to get an affordable college education.
While much has been made of the rising cost of a college education, that doesn’t mean you have to take the most expensive route to your degree. While it’s true that the cost of college has gone up substantially over just the last decade, it’s also true that you have more options than ever before for earning a degree.
While you could easily spend more than $50,000 a year on tuition alone at a private four year college, this may not be the best path for you. Indeed, you may be able to launch a very successful career in your field with a bachelor’s degree from a high-quality regional institution. When it comes to the cost of college, you are often paying for prestige as much as education. This is certainly factored into the price tag for many of the nation’s most elite schools.
And, in turn, this prestige can help you get into a top MBA program or law school. It can help you connect with industry leaders and, ultimately, it can lead to the kind of high paying career that justifies the expense of your education. But let’s be honest–we’re not all heading down that path. Many of us simply can’t afford to. And of course, schools like Harvard and Stanford admit less than 5% of applicants every year.
So unless you’re among them, all you really need is a good education at a high quality school with an accredited degree in your field. With this in mind, you do have plenty of options. Whether you’re attending college through public institutions where in-state residents enjoy significant tuition discounts or you plan to get your start through nearby community college before transferring, there are plenty of ways to reduce the cost of a four year degree.
And of course, the massive proliferation of online options now makes it possible to get that education from the comfort of your own home. This means you can earn a college degree without incurring expenses like housing, transportation and certain campus fees. All of this is to suggest that when it comes to making college worth it, there are ways to spend less, owe less, and begin profiting from your education sooner.
9. Recent college grads have current knowledge and skills.
Another reason college graduates succeed in the labor market is because this education puts you directly into contact with knowledge, skills, and best practices in rapidly evolving areas of study. Take computer science as an example. Students in college today have the distinct advantage of engaging with technology that is changing and advancing at an incredible pace right before our eyes.
With the advent of technology such as ChatGPT, for instance, students in college today will graduate with an exponentially greater understanding of how to effectively leverage AI tools and language learning models to complete practical tasks. They may likewise have a greater appreciation of the real-world risks posed by this technology.
This understanding and appreciation will almost certainly be relevant as these same students enter into the professional sphere. Employers will be seeking those who are familiar with this technology and who know how to use it, or defend against it, to advance organizational goals.
Of course, this is just one of many possible examples. The same is true in countless other fields. In areas like healthcare, information technology, legal practice, law enforcement, social services, psychology, and economics, just to name a few, new research is published constantly. New findings emerge. New practices are adopted. And innovation is always on the close horizon.
Recent college graduates have a chance to qualify for a wider range of roles, and consequently to earn more, because they may be more closely acquainted with the most up-to-date technology, knowledge, findings, and practices in their field.
10. A Bachelor’s Degree can qualify you for additional education opportunities.
Just as there is a wage premium for those who earn a bachelor’s degree, there is an even greater wage premium for those who go on to pursue an advanced degree. Those with a master’s degree earned a weekly median income of $1574 in 2021. Those who earned a professional degree such as a legal or medical degree earned a median of $1924 while those with a doctoral earned $1909.
But in order to earn any of these graduate level degrees, you must first earn your bachelor’s degree. In other words, not only does the bachelor’s degree lead to higher earnings. It is also the basic threshold for the type of advanced degree that could lead you to the highest paying roles in your field.
In fact, many working professionals with a bachelor’s degree may make the decision to pursue their advanced degree after already entering into their field. This opens the door for a wide range of possibilities in both your education and your career. You may even find that your employer is willing to assist in paying for your advanced degree, especially if your program will provide skills, knowledge, and credentials of value to your organization.
But the first step is to get your bachelor’s degree. As long as you’ve done so from a properly accredited four-year institution, you should have the opportunity to pursue further education when you’re ready.
Making Your College Education Pay
There are plenty of other factors to consider when it comes to getting your money’s worth. For one thing, your earning potential may vary significantly depending on your field. For instance, top earners are often in fields such as business, engineering, and science. If you plan to pursue a career in the arts, social sciences, or education, your earning potential may be more modest. When you decide how much to spend on your college education, make sure you take these factors into account.
Likewise, geography matters a lot in this conversation. Where you choose to live and work will also play a direct role in your earning power–both how much you are likely to make in your chosen profession and how far that money will go in matching your cost of living.
All of this is to say that the value of your college degree will depend on a lot of factors that are very specific to you. College can and should be worth the money. But whether it’s worth it or not for you will depend on how well you balance these considerations.
If your plan is to look for a gig that pays a bunch of money right out of the gate, we suggest you jump from here to our look at the 10 Best College Degrees for Earning a Six-Figure Salary.