A recent Pew survey found:
A majority of Americans (57%) say the higher education system in the United States fails to provide students with good value for the money they and their families spend.
Is a college education a good Return On Investment (ROI) for most Americans?
Depends on the college.
Payscale provides college ROI ranking.
There are 1248 colleges on the list, of which 352 have negative ROI.
As for doubt "how can negative ROI exceed the cost of the college"?
Return from Attending College: The main financial benefit of attending college is the gain in income received by a college graduate over a high school graduate. However, by choosing to attend college, one is giving up four to six years of income one could have received if one went straight to work after high school. Therefore, we calculate the gain in pay over a high school graduate (earnings differential) as the difference between the 30-year median pay for a 2011 bachelor's graduate and weighted 34-36 year 75th percentile pay for a high school graduate.
Yes. According to the Bureau of Labor Statistics the median usual weekly earnings increase with increasing level of education, while the unemployment rate declines.
As the graph shows, unemployment rate for people with high school diploma is 1.8 times that of people with bachelor's degree. The median weekly earnings are double for bachelor degree holders compared to people with high school diploma.
This has been the trend consistently for many years.
An interactive version of the chart given above consistently shows unemployment rate for high school graduates roughly double that of college grads.
Is it worth it? That's more difficult to say. It depends on the type of school attended, the degree attained, and a number of other factors. We can do a quick back of the envelope calculation to get a feel of where the numbers stand:
Assuming the median college grand makes $500 more per week than a high school grad, that's ~ $25,000 per year.
According to this website
half of all full-time undergraduate students at public and private nonprofit four-year colleges attend institutions that charge tuition and fees of $11,814 or less
As per this chart, the average public 4 year college tuition for an in-state student is $9400 per year, for a total of ~ $40,000. Assuming you earn roughly $25,000 more per year, you get your investment back in under 2 years. Even for private college graduates who pay on average $32,400 per year, or roughly $130,000 total, it's still under 6 years to get your investment back.
I think it's pretty clear that, for the median college grad, the cost of college is well worth it considering that even someone who payed their way through a private college, without any financial help (grants, scholarships), can recoup their investment in mere 6 years and reap the benefits for another 35+ years.
I don't think this can be answered so easily. Vartec's answer looks at earning potential across the board.
http://www.pewresearch.org/fact-tank/2015/12/04/education-and-marriage/ Shows that Collage has an effect on marriage longevity.
Researchers at the National Center for Health Statistics estimate that 78% of college-educated women who married for the first time between 2006 and 2010 could expect their marriages to last at least 20 years. But among women who have a high school education or less, the share is only 40%.
Though some of their findings may be consider coincidence instead of causality.
Other factors include Job satisfaction (https://trends.collegeboard.org/education-pays/figures-tables/job-satisfaction-education-level-2008) That shows that Collage graduates are slightly more likely to have a little more "satisfaction" then a few other categories. But, again this may be more subjective then anything. It's also important to note that difference between "High school graduate" and "Bachelors" is minimal.
There is also lifespan (http://abc7.com/archive/8664380/ has a nice summary)
The Centers for Disease Control and Prevention released Wednesday their annual report on health in the United States where statistics showed that, on average, 25-year-olds who received a bachelor's degree had a life expectancy almost nine years longer than those who did not have a high school diploma.
But here again the difference is between Not graduating high school and graduating collage. If you look at the linked report you can infer more interesting things.
In many cases it comes down to what does the individual think. In my personal experience there are a few jobs for which a degree of one form or another is a requirement, for example Doctors. There are many jobs that only exist to further academics, for example Scientists. Then their are jobs that probably work better with formal education, For example Lawyers. Finally there are jobs that would work more effectively with other types of post secondary education, for Example Software Developer.
While a great many jobs need some kind of education beyond the general "stuff" thought at the high school level, I don't think you can actually quantify, on a global scale, the best way to teach those skills, and because you can't quantify that, the value of experience, and the ability of the person to negotiate their "worth", I don't think you can get a good base line on rather or not "Collage is worth it". Everyone has to make their own personal decisions. You can't put a price on happiness, and no matter what a graph tells you, if you feel you need 4 more years of education to be "complete", then skipping it will always be a sore spot.
College is not the financially optimal choice for most Americans.
The Education Data Initiative did a detailed analysis, taking into account a number of factors: tuition, lost income, and student loan interest rates. You can read more on their methodology.
The conclusions were that on average it takes 11 years of employment to break even on the cost for a bachelor's degree, but there is a 682% lifetime return on investment over a 40 year career.
Naturally, the ROI varies widely on school and major, (and vary even more by individual). A finance degree had the highest ROI (1,842%). Computer and information sciences also had a high ROI (1,743%). Education had the lowest ROI (-55%).
Unfortunately, this analysis excluded the opportunity cost of market earnings.
The S&P 500 performance over the last 40 years has been 9.8% per annum, or 4,200% over 40 years. I.e. $10,000 invested in 1985 becomes $420,000 in 2025. This effectively wipes out the average ROI figures above.
(However, a complicating factor is that student loans are preferentially subsidized. Due to this, their cost is not necessarily 1:1 substitutable for other opportunities; i.e. you can't take out a student loan to invest in the stock market, though it would highly profitable if you could.)
A top-liked answer to this question references a PEW survey of Americans. That gives us a sense of satisfaction or dissatisfaction with college, but does not empirically answer the question (1) if college is worth the cost, and (2) for most Americans.
College is a significant investment in out-of-pocket costs and opportunity costs estimated at over $215,000 for the median US four-year college graduate (see chart below). As with all investments, we should be able to empirically assess whether that investment yields a favorable or subpar return for both the individual and the majority.
Is college worth the cost for an individual in the USA? The answer will depend on the chosen field of study, the amount the student pays to attend (including the length of the program, out-of-pocket expenses, and opportunity costs), and the institution's quality in delivering graduates that employers value. For many, college will be a good investment. Unfortunately, for many others, it's not.
The question aims to understand whether most of those degrees are good investments. We can explore this answer factually by looking at what it means for the median student (midpoint of assumptions on cost and income):
We can determine that a median college graduate (holding a 4-year degree) is a subpar investment by projecting the Net Present Value of Their Lifetime Earnings, net of costs and taxes.
Comparison of Median High School and College Graduates' Career earnings and Present Value of Career earnings after taxes
I first did this analysis in 2013 and updated it in 2025.
My analysis utilizes the college-reported costs and earnings from the Department of Education's NCES source (College Scorecard) to compare the median college graduate with the median high school graduate, employing the traditional Discounted Cash Flow model for evaluating investments.
Update: Given the questions posed, here are some highlights of the research and why we arrived at the conclusion above:
Cumulative cash flow for the first four years of college, illustrating the opportunity cost that must be recovered even if you paid no tuition or fees
Cumulative Cash Flow For a Career - The financial impact of Taxes and Time Value of Money
Most Colleges are below breakeven to HS Graduates when comparing the salary required to pay for the college investment
We can identify that if a student attends college without tuition, meaning they only have the opportunity cost to make up, they need to earn approximately $50k upon graduation to break even with a high school graduate. The following chart plots all four-year colleges in our analysis at the time of writing. Note the large number of institutions that will be subpar investments if the schools were free to attend:
Colleges' Median Costs and Earnings and their relation to High School breakeven earnings required
Assumptions, caveats, and data sources when determining a college return on investment are explained here.
Each potential college-bound student will have a different answer based on their interests, capabilities, and choices. One is likely to generate a positive return if the field of study is among the high-demand-to-supply set, the student demonstrates academic excellence, and the costs of attendance are reasonable at an institution that produces graduates favored by employers.
Request: I have noticed a prevalence of downvotes without comments. It would be most helpful to improve the answer if you could leave a comment with your reason for downvoting, whatever that may be.
I am happy to answer questions not addressed above or in the attached links.
Questions Raised and Rebuttals
A. MisterMiyagi asked about sources. Each chart lists the primary data sources, and the page linked above provides a detailed explanation of the assumptions, caveats, and data sources used in the analysis. I am adding a brief explanation here, FYI: My team and I built an investment model using a series of assumptions and public data, which creates a synthetic forecast of a high school graduate, an individual college choice, and the median college student. We downloaded data from the college scorecard. The same data is also available from IPEDS/NCES, but it is a little harder to extract there. We used the May 2024 download for this analysis. The relevant data used included the median cost to attend the college, the full price, and the median earnings upon graduation. All of the data used has been excerpted and included in the spreadsheet file. Also included are sources and an explanation of the significant assumptions. I encourage peer review, so please get in touch with me, and I will be happy to send you the complete spreadsheet.
