We all know that the cost of college has been increasing significantly more that the cost of inflation. It seems that the current average cost of attending a four-year private university is now nearly $42,500 per year, triple the price tag in 1990. This is the equivalent of a year’s income for a median household today after taxes. Even the state schools cost students nearly $19,000 on average per year, more than a 100 percent increase over the last 25 years. While wages have stagnated, college tuition has continued to climb, growing at a faster rate than both inflation and median income levels.
Rising costs are putting a college education increasingly out of reach for families. There are those who have chosen to turn to personal savings and student loans to make up the difference. Parents and grandparents are also putting their own retirement savings in jeopardy to aid in the financial gap.
The cost to attain a degree has risen and earnings for college graduates and non-graduates alike have fallen. While there’s plenty of evidence that a higher education provides a gateway to higher-paying jobs, the return on a college degree can vary widely, depending on a range of factors.
Which leads to question; is a college degree worth it anymore?
On that question, the consensus is still a resounding yes, at least from a certain segment of the market. The NY Fed has estimated that college graduates still earn about $1 million more over their lifetime than those without a degree. The so-called college wage “premium”, is the difference in average earnings between college graduates and those with just a high school diploma, which averaged about 56 percent over the last three decades.
Those who have started a degree and have not finished they have fallen behind those who have not even started a degree. These former students now have the debt load, but not the increased “premium” to pay off the loans.
Also, a warning has to be issued for which major to get your degree in. There are significant unemployment rates for individuals with certain degrees with low job opportunities. The degree does not automatically generate a decent paying job.