Over the course of the last few years, higher education has been subject to much criticism and debate. On one side, high-cost, traditional brick-and-mortar universities have been called to task for their exorbitant tuition and for insular, out-of-touch policies regarding everything from admissions practices to curriculum. On the other, certain online institutions have been rightly condemned for unethical recruiting tactics and the manipulation of the federal financial aid system. (For more on CalSouthern’s position on federal financial aid, click here.)
However, despite the criticism, two reports recently released by the federal government confirm the good news for those with, currently pursuing or considering a college degree: statistically, it remains a reliable path to higher earnings and a hedge against unemployment.
Earlier this spring, the United States Department of Labor’s Bureau of Labor Statistics released earnings and unemployment data by level of educational attainment for the year 2013. It powerfully illustrates the impact that higher education has on earning power. The report finds that those with only a high school diploma had median weekly earnings of $651 for the year 2013, or $33,852 annually. Those with a bachelor’s degree, on the other hand, earned $57,616. The earnings figure increased to $69,108 for those with a master’s degree, while graduates of doctoral programs enjoyed annual compensation of $84,552. All of these figures represent increases over the 2012 figures.
The unemployment data is also improved over the 2012 figures. Nationally, high school graduates had an unemployment rate of 7.5 percent in 2013. The figure dropped to 4 percent for those with a bachelor’s degree, 3.4 percent for master’s grads and 2.2 percent for those with a doctorate. (The overall unemployment rate for all workers was 6.1 percent.)
A second report, published in May by the Federal Reserve Bank of San Francisco, puts the issue in even more tangible terms. It finds that the average U.S. college graduate will earn $831,000 more over the course of his or her lifetime than those without a degree. This estimate even takes into account the cost of tuition and wages lost during the time it typically takes to complete a degree.
“Although there are stories of people who skipped college and achieved financial success, for most Americans the path to higher future earnings involves a four-year college degree,” wrote the regional federal bank’s associate director of research Mary C. Daly and research associate Leila Bengali. “Once the investment is paid for, it continues to pay dividends through the rest of the worker's life, leaving college graduates with substantially higher lifetime earnings than their peers with a high school degree.”
The study contemplated a college student who pays $21,200 annually in tuition and cautioned that for those who pay the sky-high tuitions associated with some of the “prestigious” institutions, the earnings advantage might be lower: “Although some colleges cost more, there is no definitive evidence that they produce far superior results for all students," Daly and Bengali wrote.
The bottom line is that a [reasonably priced] college degree remains very good for your bottom line.