College Does Pay Off, but It's No Free Ride

Is that college diploma paying for itself yet?  At DWCM we have made college and the value of a college degree a focal point with our clients and readers [January 20, 2012 Is College Still Path to Success, [November 3, 2011 What's Your Kid Getting From College].  You hear figures bandied about regarding a college graduate makes more than $1m over the course of their career vs.a non-college graduate.  Although most studies find that college graduates do make more than non-college graduates studies may not account for the cost of that degree nor the opportunity cost of forgoing that college degree.  Example think Mark Zuckerberg at Facebook or Bill Gates at Microsoft each dropping out of Harvard to build their companies.


This latest story from the WSJ is focused on what return you get for that degree.  College Does Pay Off, but it's No Free Ride

• students who attend college generally have better earnings prospects than their high-school classmates who go straight to work. So any estimate of college's monetary value needs to separate out those factors.
• College does pay off for most, and just completing a year or two boosts future income. In addition, prospective students who are on the fence about college are the most likely to benefit, according to several studies.
• College does pay off for most, and just completing a year or two boosts future income. In addition, prospective students who are on the fence about college are the most likely to benefit, according to several studies.

• researchers can estimate how much more someone who stops at a bachelor's degree will make than someone with just a high-school diploma: about $1 million, among those in each group who will work full-time from age 25 to age 64.
• But they don't account for tuition—and student-loan interest—nor lost wages. They also don't discount future earnings, which are worth less than money earned today. The chief flaw, though, lies in assuming that the only difference between college graduates and high-school graduates who don't attend college is the additional diploma.