Should Everyone Go to College?

On average, the benefits of a college degree far outweigh the costs. Looking at lifetime earnings, the total wage premium for a bachelor’s degree is $570,000.
Earnings trajectories by educational attainment
$80k

1

BACHELOR’S
$60k

$40k

$20k

HIGH SCHOOL

$0

24

28

32

36

40

44

48

52

56

60

64

Age But the key phrase here is

“ON AVERAGE”
Several key dimensions significantly affect the return on a college degree, including
SCHOOL SELECTIVITY COLLEGE MAJOR GRADUATION RATE

#1

?

#1

Not every bachelor’s degree is a smart investment

Public schools tend to have higher return on investment (ROI) than private schools, and more selective schools offer higher returns than less selective ones.
Annual return on investment of a bachelor’s degree 2
PRIVATE, NOT-FOR-PROFIT PUBLIC

NEARLY

14% 12 10 8 6 4 2 0

1 in 5
of the 853 schools studied by PayScale offered a negative ROI.
NONCOMPETITIVE

MOST COMPETITIVE

HIGHLY COMPETITIVE

VERY COMPETITIVE

COMPETITIVE

LESS COMPETITIVE

?

Major matters

Recent analysis by the Census Bureau also shows that the lifetime earnings of workers with bachelor’s degrees vary widely by college major and occupation.
Work-life earnings, in millions of $U.S., by major
3.5 3.0 2.5 2.0 1.5 1.0 0.5 0

3

BACHELOR’S DEGREE AVG.

HIGH SCHOOL AVG.

ENGINEERING COMPUTERS SCIENCE BUSINESS AND AND MATH ENGINEERINGRELATED

PHYSICAL SCI.

SOCIAL SCI.

COMM- BIOLOGICAL LITUNICATIONS SCI. ERATURE

LIB. ARTS

PSYCH.

ARTS

EDUCATION

The lifetime earnings of an education or arts major working in the service sector are actually lower than the average lifetime earnings of a high school graduate.

Debt without a degree
Students who fail to obtain a degree incur the costs of an education without the payoff. More selective schools tend to have higher graduation rates. Fewer than
Average six-year graduation rates by school selectivity
100% 80 60 40 20 0

4

60%
of students who enter four-year schools finish within six years.

88

MAXIMUM

75
MINIMUM

62 49 40 35

MOST COMPETITIVE

HIGHLY VERY COMPETITIVE COMPETITIVE

COMPETITIVE

LESS COMPETITIVE

NONCOMPETITIVE

Policy implications
What can policymakers provide to help students make smart investments in their postsecondary education?
BETTER INFORMATION PERFORMANCE-BASED SCHOLARSHIPS GOOD ALTERNATIVES TO COLLEGE

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Information on financial aid and graduation rates needs to be more readily available. The PayScale college rankings and the Obama Administration’s new College Scorecard are steps in the right direction.

Good research on programs like Georgia’s HOPE scholarships or West Virginia’s PROMISE scholarships suggest that attaching strings to grant aid can improve college persistence and completion.

There are many well-paid job openings going unfilled because employers can’t find workers with the right skills—skills that young workers could learn from training programs, apprenticeships, a vocational certificate, or an associate’s degree.

All of this suggests that it is a mistake to unilaterally tell young Americans that going to college—any college—is the best decision they can make. A bachelor’s degree is not a smart investment for every student in every circumstance.