# The Blog

## Calculating the value of a college degree? It’s time to go back to school.

2012 Sep 14

The chattering higher education opponents, led by horror stories of students who were foolish enough to borrow \$200,000 and end up with a double major in comparative religion and nonverbal performance studies, continue to raise the question of value of a college degree. Yet even when his hedge fund was hiring an analyst, Peter Thiel—who famously handpicked students out of high school or college and offered them \$100,000 to take an entrepreneurship path—advertised that the successful candidate would have a “high GPA from a top tier college.” You can’t buy irony like that. And though I know it won’t put the debate to rest for good, let’s go back to the classroom to review a few facts:

- Median debt for the 2/3 of college students who borrow to finance their education is only \$12,800.[i]  Half of all indebted college graduates owe less than \$12,500; ninety percent owe less than \$50,000.[ii] Median debt for the 2/3 of college students who borrow to finance their education is only \$12,800.[iii]  Half of all indebted college graduates owe less than \$12,500; ninety percent owe less than \$50,000.[iv]

-For people under 25, those with a high school diploma or less face an unemployment rate of more than 31%, while those with a baccalaureate degree or greater have an unemployment rate of just over 9%.[v]

- For those over 25, the margin narrows but the gap remains.  People who never finished high school have an unemployment rate of 12%; high school graduates rate is nearly 9%; those with some college are at 6.6%; and those with a baccalaureate degree or greater are just over 4%.[vi] See the pattern?

- In terms of lifetime earnings, high school graduates earn about \$1.2 million, bachelor’s degree holders earn an additional \$900,000 to an average \$2.1 million, and people with a master’s degree \$2.5 million.[vii]

- “With an annual rate of return of 15.2 percent, college has outpaced just about every other general investment category, including gold, corporate bonds, U.S. government debt, and hot company stocks.”[viii]

- Over the next decade, employment for people with college degrees is forecast to grow twice as fast as the overall job market.[ix]

- 62% of jobs will require college education by 2018, and more than half of those will require at least a bachelor’s degree.[x]

Having done our homework, it’s clear that we need to stop arguing about whether it’s worth it and focus our attention on figuring out how to make it work better.

— Robert Moore, Ph.D., President and Chief Executive Officer

[i] Andrew J. Rotherham, “Student Loans: Is There Really A Crisis?”, Time Ideas, 17 May 2012

[ii] Derek Thompson, The Atlantic, 14 May 2012

[iii] Andrew J. Rotherham, “Student Loans: Is There Really A Crisis?”, Time Ideas, 17 May 2012

[iv] Derek Thompson, The Atlantic, 14 May 2012

[viii] Derek Thompson, op. cit.

[ix] Derek Thompson, “What’s the Best Investment: Stocks, Bonds, Homes…or College?”, The Atlantic, 27 June 2011

[x] Georgetown University Center on Education and the Workforce, 2009