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Is College Worth the Cost of Tuition? Yes.

Earlier this year I finished writing an article in which I tried to find the salary breakeven point for private vs. public college graduates [3], a task that was impossible because I couldn’t find enough publicly available information at the time. I was trying to figure out whether college was “worth it” and if so, whether public or private college was a better value. Since I didn’t have enough data, I just took some “average student loan debt” figures and calculated the breakeven point.

In a recent Business Week article [4], they took a 2007 College Board analysis that showed college graduates earned 61% more than high school graduates over a 40 year career. Master’s degrees earn 93% more. It’s not the private college vs. public college debate but it’s certainly a good look at whether student loan debt, in general, is worth it.

The most astounding statistic they calculated was that the breakeven point, when a public college student with student loans surpasses a high school student without loans, is at thirty-three years of age. That’s a lot sooner than I would’ve guessed, to be perfectly honest. I expected it close to the late thirties than the early thirties. While that may change given the economic realities of today (it’s based on 2005 census data), 33 is a lot sooner than you probably would’ve guessed.

Curious what the median earnings (pre-tax) are for workers ages 25 and older by education level (2005)?

The 2007 College Board analysis [5] has a lot of interesting findings too, I recommend you take a quick look if you’re interested in higher education statistics. There are plenty of graphs that illustrate the data very well. Plus, we can look forward to another one of these soon as the next census is 2010.

(photo by CarbonNYC [6])