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College degrees expensive but also really valuable

We hear a lot these days about the crushing burden of college debt on today’s college graduates. But one thing that’s tougher than having to deal with the rapidly rising cost of college and skyrocketing student loan debt is the financial burden of not going to college at all.

A recent review of census data by the Pew Research Center found that college graduates make a lot more than less-educated workers, and that the gap is growing rapidly.

Between 1991 and 2012, the average household income of a householder with a bachelor’s increased from $92,289 to $100,637, while income for households with a high-school education fell from $54,707 to $52,199. Over the course of a 40-year career, that difference would add up to almost $2 million less in lifetime earnings for those with only a high-school diploma.

Making it all the way through a bachelor’s degree seemed to be the key; those with “some college” or an associated degree also fell by 5 percent between ’91 and ’12. If that’s not enough, the current unemployment rate for those with a high school diploma is 7.6 percent; for those with a college degree it’s 3.5 percent.

Of course, your mileage may vary; some kinds of degrees, and degree holders, are destined to generate more money than others, and some graduates who are employed aren’t doing anything related to their major. But it seems clear that if you have the opportunity to snag a college degree from a reputable school, you should. Even if you have to take on a substantial amount of student debt — $26,600 per borrower is the average these days, according to a 2012 report by The Institute for College Access and Success — these figures suggest it’s well worth it over the course of a typical lifetime.

Also, while people rightly complain about the fact that 4-year costs at some schools has ballooned beyond the $200,000 mark, you don’t have to nearly that much to get a serviceable college education. Worrying about what expensive private schools like Princeton and American University are charging is sort of like complaining about the cost of a Bentley when all you need to get where you’re going is a Honda Accord.

Down here in lovely South Florida, you can attend Palm Beach State College, a former community college that recently began offering some bachelor programs, for just under $3,000 a year in tuition and fees. After two years there, you can transfer to Florida State University (incidentally, my alma mater) for around $6,600 a year and graduate with a diploma from FSU for just over $19,000 in total cost. That’s still a lot of money, but it’s less than the cost of one semester of tuition at good ol’ Princeton which is $41,750 per year.

Now of course there are benefits to going to Princeton that you won’t get with an FSU diploma, such as rubbing elbows with future presidents [3]. But at least it will get you going on those lines going up, and not the ones going down.

(Photo: Joselito Tagarao) (Chart: Pew Research Center)