The benefits of a college education are well known to help individuals jump start their careers and live to more successful life. However, many individuals in today’s world are choosing to ignore these potential advantages. While college may be expensive, the likely return on investment can yield enormous returns. Most importantly, these returns are almost guaranteed for individuals who complete their college education. This will take a look at how the true costs of not attending college are rising in today’s world.
Why College Is Important
Over the past couple of decades, the United States has become an information economy. This means that the majority of productivity comes from activities like writing, programming, and consulting. Individuals are increasingly getting jobs as doctors, lawyers, and engineers. Unfortunately, it can be nearly impossible to find a good job without a college degree. For the same cost of hiring a unionized American worker at minimum wage, a business could hire a hundred employees overseas. Many individuals interpret this as a bad thing, but the reality is that this helps everyone overall. However, this does make it imperative that individuals attend college in order to take advantage of the information economy.
Employers are looking for graduates who are competent in a specialized field. At universities, students can learn skills that are hard to find. As a result, employers are willing to pay a high premium to take advantage of this knowledge. However, individuals who only possess a broad knowledge from a high school education are unable to find a specialized position. Nobody is going to pay someone for something that they can do themselves. For this reason, it is important for individuals to develop a specialty to enables them to trade their skills for goods that they wish to purchase.
Return on Investment
According to a study conducted by the Pew Research Center, millennial college graduates tend to earn about $17,500 more than individuals who only possess a high school diploma. The study also found that just 5.8 percent of young adults who possess a bachelor’s degree struggle with poverty. In contrast, about 21.8 percent of high school graduates live in poverty. In addition to making more money, individuals with a college degree tend to have a lower unemployment rate. Just 3.8 percent of individuals with a bachelors degree are unemployed. In contrast, 12.2 percent of individuals with a mere high school education have problems with unemployment.
As a conservative estimate, assume that a college degree costs $100,000. In many cases, individuals can complete college for much less. By earning an additional $17,500 per year, college graduates can expect to justify their college education within just five years. It is true that there could be some tax implications or interest that must be paid, but the cost of a college education will undoubtedly be exceeded within a single decade.
Some individuals may question these statistics because they do not factor in the cost of not working for four years. However, there are several points that need to be made. A college degree can be completed at the same time that an individual works full-time. Over a period of several years, individuals can gradually earn their degree by working at night. During this process, employers will probably promote the working student to a higher position that pays several times more. It is also likely that an individual who chooses to not attend college will probably have a difficult time with unemployment. In today’s economy, employers have almost started to expect that employees pursue higher education.
Growing Disparity Between High School and College Degrees
Until just a couple of decades ago, individuals could expect to make a decent living without a college degree. Unfortunately, the income disparity between college graduates and high school graduates is sharply increasing. In 1979, the average college graduate with a bachelor’s degree earned $41,989, while a high school graduate earned $32,299. In today’s world, this gap has widely grown. The average individual with bachelor’s degree now earns $45,500, while an individual with a mere high school degree earns an average of $28,000 per year. In fact, this shows that the income potential that can be derived from only a high school degree is actually declining over time. As time goes on, the value of a bachelor’s degree is starting to increase. For this reason, individuals can expect their college degrees to continue providing benefits for many years to come.
Later in Life
In addition to growth over time, bachelor’s degrees will also yield much greater lifetime earning potential. While an individual with a high school degree can expect relatively flat income throughout their entire career, college educated individuals can experience exponentially growing incomes. This can make it easier for individuals to save additional money for retirement or investments. When compounded over a 40-year period, the benefits of this income disparity can be truly astounding. Many college graduates end their lives in a comfortable retirement with enough money to live well off the interest value of their investments. In contrast, uneducated individuals are usually unable to set aside enough money to retire. As a result, they have to work for the rest of their lives with little savings or additional income.
During the college education process, there are additional benefits that should not be ignored. Individuals who receive a college education are able to make better decisions in their personal lives. This can make it easier to make decisions related to relationship matters, personal finances, and life goals. Some individuals are not strictly focused on money, and this is yet another advantage of college. College allows individuals to explore their inner-selves to find what they are truly passionate about. Whether climbing Mount Everest or becoming a great painter, the foundational knowledge learned in college can make it easier to succeed at any activity. College teaches rational decision-making, ethics, political theory, and more. This knowledge can help individuals to be better it just about anything that they do.
In almost all situations, not attending college can be the biggest mistake that individual ever makes. Think twice before discounting the potential advantages of earning a college degree.