Goldman Sachs Looks At Higher Education, Very Darkly

Bryan Alexander
:

[U]sing SAT scores as a proxy, the gap in alumni earnings between colleges in the 99th percentile of scores and the 99.9th is as big as the gap between the 1st percentile and the 20th. If future wages for an individual joining college today were 30% below the average wages expected for college graduates, they wouldn’t break even until they were over 50. Graduates studying lower paying majors such as Arts, Education and Psychology face the highest risk of a negative return. For them, college may not increasingly be worth it.


The average return on going to college is falling. For the typical student the number of years to break even on the cost of college has grown from 8 years in 2010 to 9 years today. If current cost and wage growth trends persist then students starting college in 2030/2050 will have to wait 11/15 years post college to break even. 18 year olds starting college in 2030 with no scholarship or grants will only start making a positive return when they turn 37.

The complete report is available here.