The Economics of a Bachelor’s Degree

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Is get­ting a bach­e­lor’s degree still worth it? When weigh­ing the pros and cons of high­er edu­ca­tion, there are a lot of things to con­sid­er. Let’s look at what the num­bers say about get­ting a bach­e­lor’s degree.

Economics of a Bachelor's Degree
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Bachelor’s Degrees are Worth $1 Million Over Life of Career

Col­lege grad­u­ates earn an aver­age of almost $20,000 more per year than work­ers with only a high school diplo­ma. That adds up to $1,000,000 more over the life of a career. This means that col­lege grad­u­ates who man­age mon­ey well can retire very com­fort­ably. By 2020, it’s esti­mat­ed that 2/3 of jobs will require a col­lege degree. In these respects, obtain­ing a bach­e­lor’s degree is essential.

Getting a Bachelor’s Degree is Expensive

How­ev­er, going to col­lege has nev­er been more expen­sive. Over the past 30 years, tuition costs at 4‑year uni­ver­si­ties have dou­bled. To make things even worse, only 30% of bach­e­lor’s degrees were cov­ered by Pell Grants in 2015. This is the low­est amount in U.S. his­to­ry and half of what was cov­ered in 1980.

Edu­ca­tion is most expen­sive when stu­dents don’t grad­u­ate. When there is no return on the col­lege invest­ment, for­mer stu­dents are three times more like­ly to default on stu­dent loans. At risk are the 40% of all first time col­lege stu­dents who don’t grad­u­ate with­in six years. A quar­ter of all col­lege dropouts default on their stu­dent loans with­in three years.

College Graduates Have a Higher Quality of Life

The ben­e­fits of earn­ing a bach­e­lor’s degree go far beyond the pay­check. In addi­tion to being on the bet­ter side of the widen­ing wage gap between col­lege and high school grad­u­ates, those with a bach­e­lor’s degree also enjoy increased job secu­ri­ty, bet­ter mar­riages and high­er job sat­is­fac­tion.

Student Debt is an Increasing Burden

Find­ing the mon­ey to pay for col­lege has been get­ting more dif­fi­cult every year. Amer­i­can fam­i­lies and stu­dents are tak­ing on more debt than ever before to pay for the ris­ing costs of col­lege. The cost of col­lege has risen faster than almost every oth­er indus­try while wages remain stag­nant. The aver­age debt for a bach­e­lor’s degree increased 2x more than the rate of infla­tion from 2004 to 2014. As a result, Amer­i­cans owe $1.3 tril­lion in stu­dent debt. This debt is ris­ing by $2,726.27 every second!

It’s easy to see that the vast major­i­ty of stu­dents in the US will grad­u­ate from col­lege with an enor­mous amount of debt. The aver­age stu­dent debt is cur­rent­ly $37,173. It typ­i­cal­ly takes 21 years for stu­dent bor­row­ers to repay this debt! Almost half of grad­u­ates say if they could go back in time they would recon­sid­er tak­ing on debt for col­lege. Two-thirds of Amer­i­cans agree that col­lege is too expen­sive and sim­ply not affordable.

Is the Cost of College Worth it To You?

After weigh­ing all the pros and cons, this is a ques­tion only you and your fam­i­ly can answer. The ben­e­fits of earn­ing a bach­e­lor’s degree are obvi­ous, but come at a great cost. The best col­lege plan includes com­ing up with ways to pay for school while tak­ing on the least amount of stu­dent debt possible.

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http://www.ed.gov/news/press-releases/fact-sheet-focusing-higher-education-student-success
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