How much is a college degree worth?
Turns out that a bachelor’s degree might not be as valuable as you think.
For years the College Board has suggested that a college graduate earns about $800,000 more over his or her lifetime than high school graduates. This earnings figure, however, is apparently way off.
The real lifetime earnings advantage could be just $450,000. That reduced figure comes from the College Board’s senior policy analyst. Another study by the American Institutes for Research suggests that the earnings advantage is a mere $279,893.
So what happened? It turns out that the methodology for calculating the lifetime earnings of college graduates was flawed. You can learn how the value of a college degree was overblown by reading my recent college blog post at CBSMoneyWatch.
Lynn O’Shaughnessy is the author of The College Solution, an Amazon bestseller. Follow her on Twitter.
I believe the $450K number does not include the cost of the education to the student, while the $280K does (Google ‘Education Pays 2007’ and see pages 44 and 45).
These numbers do not appear to take into account what the rest of the family pays – from savings, income and PLUS loans. Also, our progressive tax system places a higher burden on those with higher incomes, affecting the college graduate more than the high school graduate.
These factors would make even the $280K number too high.