ERIC Identifier: ED470038
Publication Date: 2002-00-00
Author: Porter, Kathleen
Source: ERIC Clearinghouse on Higher Education Washington DC.
The Value of a College Degree. ERIC Digest.
The escalating cost of higher education is causing many to question the value of continuing education beyond high school. Many wonder whether the high cost of tuition, the opportunity cost of choosing college over full-time employment, and the accumulation of thousands of dollars of debt is, in the long run, worth the investment. The risk is especially large for low-income families who have a difficult time making ends meet without the additional burden of college tuition and fees.
In order to determine whether higher education is worth the investment, it is useful to examine what is known about the value of higher education and the rates of return on investment to both the individual and to society.
THE ECONOMIC VALUE OF HIGHER EDUCATION
These sizeable differences in lifetime earnings put the costs of college study in realistic perspective. Most students today-- about 80 percent of all students--enroll either in public 4-year colleges or in public 2-year colleges. According to the U.S. Department of Education report, Think College Early, a full-time student at a public 4-year college pays an average of $8,655 for in-state tuition, room and board (U.S. Dept. of Education, 2002). A full-time student in a public 2-year college pays an average of $1,359 per year in tuition (U.S. Dept. of Education, 2002).
These statistics support the contention that, though the cost of higher education is significant, given the earnings disparity that exists between those who earn a bachelor's degree and those who do not, the individual rate of return on investment in higher education is sufficiently high to warrant the cost.
OTHER BENEFITS OF HIGHER EDUCATION
Research has also consistently shown a positive correlation between completion of higher education and good health, not only for oneself, but also for one's children. In fact, "parental schooling levels (after controlling for differences in earnings) are positively correlated with the health status of their children" and "increased schooling (and higher relative income) are correlated with lower mortality rates for given age brackets" (Cohn and Geske, 1992).
THE SOCIAL VALUE OF HIGHER EDUCA5ION
A number of studies have shown a high correlation between higher education and cultural and family values, and economic growth. According to Elchanan Cohn and Terry Geske (1992), there is the tendency for more highly educated women to spend more time with their children; these women tend to use this time to better prepare their children for the future. Cohn and Geske (1992) report that "college graduates appear to have a more optimistic view of their past and future personal progress."
Public benefits of attending college include increased tax revenues, greater workplace productivity, increased consumption, increased workforce flexibility, and decreased reliance on government financial support (Institute for Higher Education Policy, 1998).
COLLEGE ATTENDANCE VERSUS COLLEGE COMPLETION
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Day, J.C., & Newburger, E.C. (2002). The Big Payoff: Educational Attainment and Synthetic Estimates of Work-Life Earnings. (Current Population Reports, Special Studies, P23-210). Washington, DC: Commerce Dept., Economics and Statistics Administration, Census Bureau. [On-Line]. Available: http://www.census.gov/prod/2002pubs/p23-210.pdf
The College Board. (2001). Trends in Student Aid 2001. New York: The College Board.
Institute for Higher Education Policy (1998). Reaping the Benefits: Defining the Public and Private Value of Going to College. The New Millennium Project on Higher Education Costs, Pricing, and Productivity. Washington, DC: Author.
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U.S. Department of Education (2001). Digest of Education Statistics 2001. [On-Line]. Available: http://nces.ed.gov/pubs2002/digest2001/tables/PDF/table170.pdf
U.S. Department of Education (2000). Think College Early: Average College Costs. [On-Line]. Available: http://www.ed.gov/offices/OPE/thinkcollege/early/parents/college_cos ts.htm
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