It’s almost time for school to start again. I’ve talked to a couple of my community college students recently who wonder if the expense of college is going to pay off for them later on. The short answer is “yes.” (I’ll get to the long answer in a bit.)
A recent study by The Hamilton Project at the Brookings Institution, described in today’s Los Angeles Times, found that the monetary investment in a college education provides a higher rate of return over a person’s lifetime than many other financial investments:
By any financial measure, the investment in a college degree is the winning choice, with a rate of return of a whopping 15.2% a year on the $102,000 investment for those who earn the average salary for college graduates. This is more than double the average rate of return in the stock market during the last 60 years (6.8%), and more than five times the return to investments in corporate bonds (2.9%), gold (2.3%) long-term government bonds (2.2%) or housing (0.4%).
This high rate of return translates into large differences in earnings. Over a lifetime, the average college graduate earns roughly $570,000 more than the average person with only a high school diploma.
Also, the latest unemployment figures from the U.S. Bureau of Labor Statistics paint a pretty stark picture for American workers without at least some college, and preferably a bachelor’s degree. Despite overall high unemployment since the recession began in 2008, the rate among those with at least a bachelor’s degree is only 4.3 percent, and this rate has actually gone down somewhat from a year ago, when it was 4.5%. By contrast, those workers without a high school diploma are facing a 15.0 percent unemployment rate as of July 2011, and that’s up from 13.9% a year ago.
The long answer, of course, involves how hard you’re willing to work to make the college experience pay off in the long run. College is expensive, which is why it’s not worth paying for if you’re not really willing to do the work needed to maximize the knowledge gained. If you view college as another place where people (instructors, administrators) make you do things you don’t really want to/have time for (like an extended high school), please don’t go. Your education beyond high school is a choice you’re making to improve yourself, your financial future, and the lives of your own children. It’s not mandatory. Once you make the choice to go to college and spend the dough, take advantage of every minute, every opportunity. Don’t waste your time and money… be your own advocate and get all the education you’re entitled to, both through your own efforts and by insisting on being taught in a professional, responsive manner.
Should you go to college? Yes. It’s your future, take charge of it.