Is College Still a Good Investment?

Kaitlin Pitsker

A recent study from the Federal Reserve Bank of St. Louis suggested that the value of a college education has declined. Is college still worth the cost? For the average person, college is still overwhelmingly a good decision. But like any investment, there are risks. The potential negative consequences are greater now than they were for previous generations. Not only are you taking time out from the labor market, but you’re paying more to attend college. Plus, many students are taking out debt that’s nearly impossible to discharge in bankruptcy. But the biggest risk is not graduating, because you still have the debt but don’t have a degree.

Do workers who graduate with a bachelor’s degree still out-earn workers without a college degree? Yes, but the price of attending college has gone up, so the net return of a college degree has gone down a little bit. Still, over a lifetime, college graduates earn about $900,000 more relative to high school graduates. Even if you discount that figure to take into account the types of students who go to college, the “opportunity cost” of not being in the labor force and other factors, the net value of a college degree is still about $350,000 over your lifetime compared with a high school degree.