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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.”

(Digital Vision)

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: