Consumer Comeback Blog

Is college still worth the cost?

In this recession, with the rapidly rising costs of a college education and dwindling aid, a number of recent graduates, students, and applicants are beginning to wonder if a college degree is worth the cost.

The annual tuition at a typical private college now comes in at about $42,000 leaving the average 4-year degree earner with more than $25,000 in debt from student loans. Both of these numbers are on the rise. Add rising joblessness and relatively stagnant working salaries, the question then becomes: is a college degree still a good investment?  Or would it be better to skip college and peruse a career without any debt?

By the numbers

To begin our investment research, we’ll start with a typical scenario. We take the median salary for a bachelor degree holder and that of a person with only a high school degree and find the difference:

Median salary for bachelor’s degree: $51,000
Median salary for high school degree: $32,000
Earning difference: $19,000

We then take the typical cost of a 4 year degree and divide by the difference to find out how long it will take to see a positive ROI:

Cost of 4-year degree from a private school: $168,000
Divide by: $19,000
Estimated return on investment: Less than 9 years

While this is a simplified example and doesn’t tell the whole story, you can see that even an expensive private school degree will typically pay for itself in a relatively short period of time.

Field of study

Probably the largest factor for determining salary for college graduates is the area of focus for the degree. Engineering majors, for example, attract a much higher starting and mid-career median salary than, say: Philosophy majors. Part of the differences may be the ability to find a job within the same field of study, but much of it is simply demand.

So if you’re trying to figure out if college is worth the cost, your field of choice needs to be a factor. This list can provide a good idea of the typical salary by major. Because our above salary numbers for a high school graduate are taken from workers ages 25-34, and the salary by major list (instead) has starting salary and mid-career salary numbers, we’ll use the average of the two to get an adjusted annual salary as close in relation to our previous data.

Chemical Engineering Degree vs. Art Degree

Chemical engineering degree:
($58,400 + $94,500)/2 = $76,450 adjusted annual salary
$76,450 – $32,000 = $44,450 difference
$168,000/$44,450 = 3.75 years to ROI

Art degree:
($35,300 + $52,400)/2 = $43,850 adjusted annual salary
$43,850 – $32,000 = $11,850 difference
$168,000/ $11,850 = 14 years to ROI

You can clearly see that the typical engineering graduate will find it easier to pay for their education than the typical arts degree earner. That doesn’t mean you shouldn’t peruse an art degree, it just means that the choice to go to college is a more risky financial venture. And you may consider less expensive options than a private 4-year school.

School choice

Not only is the cost of school a factor for determining the potential value of investing in your education, but salary is as well. While this list is helpful in determining the relative reputation of the school in terms of earnings, these salary numbers are often effected by school type, as engineering schools are typically towards the top of the list. So if you’re picking a school based on a specific area of study, you might be better off using one of these lists instead.


One problem with our assessment so far is that it doesn’t take joblessness into account. But if you’re truly worried about your ability to get a job, I have news for you: those without college degrees find it even harder.  As illustrated by the above unemployment graphic above, without a doubt both college graduates and those without a degree are being hurt by rising unemployment. But the numbers still show that those without a degree have been hit much harder. In other words: if you want the best chance to have (and keep) a job, then you’d still be much better off getting a degree.

Make the most of College

I have two pieces of advice for those who are in college or thinking about enrolling. First: have a clear career goal in mind. If you’re not sure what you want to major in or what you’d like to do when you get out of college, you probably shouldn’t go to an expensive private school. There’s nothing wrong with exploring your options, but you don’t need to spend $40,000 a year to do it. Consider either taking a year off or go to a community college or local state school for a year or two to save yourself some money.

Second: take advantage of every opportunity possible to get hands-on experience. Grades are important, but they’re not the end-all. When you’re finished with school and applying to jobs, employers care more about applicable experience than your GPA. Participate in as many Co-ops, internships, or work a summer job in your field EVEN IF IT MEANS DOING IT FOR FREE! Graduates have been relegated to working for free just to get experience and/or their foot in the door. Take advantage of your college years’ financial freedom and get it done early and you’ll have a leg up on your fellow classmates.

So is it still worth it?

The short answer is: Yes, it is. But that will always depend on how seriously you take your education and career path. Those who get distracted by the “college experience” may find that after 4 years it’s no easier to find a job, and they’re left wondering why they paid so much for a bleak working future. For the rest, regardless of how expensive college education has become, if you take it seriously, it will probably be one of the best investments you ever make.