September 22, 2010--The Value of a College Degree

A further word about the value of education--

The College Board yesterday published a report about the economic value of various levels of educational attainment and it confirmed what we already know: a college education is a good investment. Actually, an investment that is getting better over time and a significant benefit in a changing economy and during tough economic times.

Here are some specific numbers as reported by the New York Times. (Full article and charts linked below.)

For individuals 25 and older, median 2008 earnings for someone not a high school graduate--$24,300

For high school graduates--$33,800

For associate degree holders--$42,000

And for those who graduate from college--$55,700

Additionally, the benefit for college grads has been increasing over time. In 2008, among people between 25 and 34, male bachelors degree holders earned 79 percent more than high school graduates, while females earned 74 percent more. A decade ago, the differential was 60 percent for women and 54 percent for men.

The study also took into consideration cost-benefit issues, examining whether or not the cost of tuition, student loan interest payments, and deferred earnings (not having a full-time job while enrolled in college) is recovered by the higher earnings. The College Board found that it does take some time for the cost and earning curves to intersect--on average, 11 years. That's when the earning benefit of having a college degree begins to pay off for individuals. And then, as one might expect, the return on that investment really begins to take off so that over a lifetime a college graduate makes many hundreds of thousands of dollars more than a high school graduate.

Then there are the social benefits. In addition to being healthier, more likely to become active in their communities, and stay out of trouble, these higher earning individuals pay much more in taxes over a lifetime than those with less than a college degree. They do more than just pay back to society what they may have received from having had their student loans federally guaranteed or having received a federally-paid-for Pell Grant.

We know this already from history. After the Second Wold War, in just 12 years, 7.8 million veterans were able to go to college at no cost thanks to the GI Bill. Many studies have shown the incredible benefit the GI Bill provided to both individuals and the larger society. Some credit the flood of new college graduates into the economy in the 1950s as significantly responsible for the economic surge that American experienced and which endured, with ups and downs, for decades. Until, in fact, just recently.

With this evidence from the past and present we would expect to see our leaders clamoring for more investment of this kind. Some are but generally not conservatives who claim to be devoted to seeing our economy grow.

The best trickle-down approach to building our economy would be to expand college-going opportunities of the sort that were and are being provided for our veterans.

Can you imagine how much good would be the result of a universal, civilian version of the GI Bill? Incalculable. Actually, quite calculable. We would over time see our deficit shrink and ultimately disappear if, in addition, we would rein in some of our spending.

If there ever was a social policy no-brainer, this is it.