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Despite Rising Student Debt, College Degree Is Still a Wise Investment

As troubling as some of the recent data is regarding the cost of a college education, the evidence is overwhelming that it is money well spent.

Even if you had to borrow it.

The numbers used in the media about student loan debt are intimidating:

  • Total student loan debt in the U.S. is now $1 trillion.
  • College tuition increased 42 percent over the past decade.
  • The cost of room and board soared 65 percent.
  • Only 31 percent of freshmen get a degree in four years.
  • On average, 2013 graduates with debt will owe about $35,200 in student loans.

Still, it’s worth it, says Georgetown University professor Stephen Rose, who published a comprehensive study called “The College Payoff” in 2011 as part of his work for the Georgetown Center on Education in the Workforce.

“The return on a secondary education absolutely dwarfs the costs,” Rose told “It’s not even close. No matter what your major is, you’re going to be rewarded and have more job opportunities with a college degree.’’

Return on College Investment

The payoff for college graduates starts immediately and runs straight through to retirement for both job opportunities and compensation.

The National Association of Colleges and Employers shows the class of 2013 can expect an average starting salary of $44,928. The average starting salary for those with a high school diploma is $26,000.

The disparity grows quickly as time goes on.

The Department of Labor shows unemployment for full-time workers age 25 and older with a four-year degree was just 3.9 percent in April, while the rate for high school graduates was 11.9 percent. The annual salary for full-time workers age 25 and older with a college degree was $61,828, while high school graduates were earning an average of $33,852.

“Our study found that, on average, college graduates were going to earn about $1 million more [than high school graduates] over the course of their careers,” Rose said. “And if you got a master’s degree, it’s another $400,000. A doctorate is worth another $600,000.”

Making a Major Decision

The real decision to make is not whether to go to college, but what major to take. There were significant differences in employment and compensation, based on your major.

Architecture majors, for example, faced an unemployment rate of 12.8 percent and lawyers 9.2 percent. The unemployment rates for engineering (7 percent), education (5 percent) and health sciences (4.8 percent) are less and are considered areas of job growth.

“If you choose to be an art history major, there are consequences,” Rose said. “You’re still going to make $600,000 or so more than the person with a high school diploma, just not a million more. But if that’s what you love, I would say go for it.”

Don’t Get Sticker Shock

But going for it is financially overwhelming for some families. They experience sticker shock when they see stories that the average annual cost for college (tuition, room and board, etc.) at state schools is up to $17,860. The average annual cost at private schools is $39,518.

Those numbers are “sticker prices,” meaning they don’t reflect the financial aid that 67 percent of college students now receive. The net price – after scholarships and tax breaks are figured in – is more like $12,110 a year for public schools and $23,840 for a private education.

That means parents, who can keep their children on a four-year course to a degree, are spending between $48,500 and $95,360 for a college diploma.

Rose said the Georgetown study showed that one-third of students graduate with zero debt and the $35,200 figure used as an average for the others is misleading.

“The median debt for student loans is $10,000, meaning half the people who graduate owe less than $10,000,” Rose said. “In other words, we are putting way too much emphasis on student loan debt. The level of debt most students have is reasonable and appropriate for the reward they’ll get with a college degree.”

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].

College degree still worth the student debt

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  1. Evans, J. (2013, February 11) The Rising Cost of Tuition Surpasses the Rate of Inflation. Diverse Retrieved from
  2. Clark, K. (2012, October 24) Tuition at public colleges rises 4.8%. Retrieved from
  3. Rogers, K. (2013, May 31) Yes, College is Worth it, but Your Major Matters More than Ever. Retrieved from
  4. Rose, S., Carnevale, A., and Cheah, B. (2011, August 11) The College Payoff. Retrieved from
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