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

2012 Sep 14
Comments (0)
Permalink

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

Learn more about Lipman Hearne’s approach to philanthropic marketing by visiting our website.



[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


 

 

 

Leave a Comment

Lipman Hearne will never share or publish your email. Required fields are marked *.

«

»