The Numbers Game: Is College Worth The Cost?
According to a new report from the Pew Research Center, 57 percent of Americans say “the higher education system in the United States fails to provide students with good value for the money they and their families spend.”
Does that mean that college isn’t worth it? Not exactly. In fact, given the crappy economy, a college degree is more valuable than ever, a point that Levitt makes in a recent Freakonomics Radio podcast. The most telling statistic as to the value of college: the unemployment rate among college graduates is less than half (4.5%) than people with only a high school diploma (9.7%). (See the BLS employment status table here.)
Still, it’s an interesting question, particularly given the explosive growth in the price of college tuition over the last 30 years. According to the College Board, a year of tuition at a public college for an in-state student costs an average of $7,605, while a year at a private college costs an average of $27,293. Meaning that (assuming you graduate in four years) a college diploma from a public school costs about $30,000, and about $109,000 from a private school. That’s a lot of coin, but consider this: the difference in yearly income for a person with a college degree and a person with just a high school diploma is $19,550, according to the 2010 Census. So keeping things simple, on average, a public school college degree pays for itself in less than two years, and a private school diploma in less than six. Which is probably why, according to the Pew study, the vast majority of college graduates (86%) say that college was a good investment for them.
The Pew report, conducted in partnership with the Chronicle of Higher Education, offers lots of useful insight into the current state of American higher education. Among some of the more interesting nuggets:
- Only 19% of college presidents say the U.S. system of higher education is the best in the world now, and just 7% say they believe it will be the best in the world 10 years from now.
- Adults who graduated from a four-year college believe that, on average, they are earning $20,000 more a year as a result of having gotten that degree. Adults who did not attend college believe that, on average, they are earning $20,000 a year less as a result.
- Only a quarter (24%) of college presidents say that, if given a choice, they would prefer that most faculty at their institution be tenured. About seven-in-ten say they would prefer that faculty be employed on annual or long-term contracts.