A Cost/Benefit Analysis of a Bachelor’s Degree
There are many reasons people go to college for a bachelor’s degree: to get a better job, to follow intellectual pursuits or maybe just to get out of town and try something new. Whatever the reason, there’s no denying that college is pretty expensive these days. So, is it really a good investment? That may depend on your major, the college you attend and your ultimate career goals.
Public Opinion
According to a recent survey done by the Pew Research Center:
- 57% of Americans say higher education is not worth the cost.
- 75% of Americans think higher education is too expensive.
- 86% of college graduates agree that college was a good personal investment.
- 48% of college graduates with student loans say their debt made it hard to pay other bills.
- 55% of college graduates say their degree prepared them for a career.
- 48% of the public think that students and parents should be responsible for the cost of college.
Tuition vs. Earnings
Annual, four-year college costs on the rise (2,3)
Year / Tuition, room and board (public) / Tuition, room and board (private)
-
- 1973 / $8,416 / $16,979
- 1978 / $8,000 / $16,000
- 1983 / $8,400 / $17,100
- 1988 / $8,900 / $24,000
- 1993 / $10,100 / $25,900
- 1998 / $11,000 / $28,100
- 2003 / $13,750 / $33,900
- 2008 / $14,900 / $35,100
- 2013 / $18,391 / $40,917
Median lifetime earnings
-
- High school diploma: $1,304,000
- Four-year bachelor’s: $2,268,000
That is a difference of $964,000 over the course of a lifetime.
Average annual income by college major
-
- Education: $44,950
- Visual/performing arts: $49,150
- Psychology: $50,025
- Liberal arts and history: $51,150
- Literature and languages: $52,075
- Biology and environmental sciences: $57,200
- Communications: $58,325
- Social sciences: $60,150
- Physical sciences: $63,425
- Business: $64,075
- Computer science and mathematics: $76,100
- Engineering: $83,725
It Pays to Finish
Annual income, ages 25-34
-
- Four-year bachelor’s degree: $45,000
- Some college, no degree: $32,900
Unemployment rate, ages 25-34 (2)
-
- Four-year bachelor’s degree: 4.1%
- Some college, no degree: 9.8%
Default rate on student loans
-
- Four-year bachelor’s degree: 3.7%
- Some college, no degree: 16.8%
The return on investment (ROI) for a college degree is around 15%, which is generally considered to be a good venture.
Sources:
1. http://www.pewsocialtrends.org
2. https://www.khanacademy.org
3. https://www.washingtonpost.com
4. https://www.newyorkfed.org
