College has always been held in high regard for our children and with good reason – the average college graduate will make far more than the average high school graduate over their lifetime. Still, with the rising costs of going to college and the economy in a funk, it makes one wonder if a college degree is worth the investment. When you think of this question at surface level, the clear answer is yes. When you dig a little deeper, you start to wonder a bit.
College degrees have a clear impact, even today, on the amount of money that we will make. We will earn more money as a graduate. That is a clearly established rule of thumb. The problem with this, however, is the dramatic gaps between the various degrees. If you major in engineering for example, you will earn many times the amount of someone that majors in social work. These gaps skew the value of a college degree as an investment. If you are an engineer, then you will clearly make a strong return on your investment. If you go into social work, you may actually lose money.
One must also take into account the fact that many jobs are not available without a college degree. This works clearly in favor of going to college as an investment. If you wish to be a doctor, you clearly have to go to college. Ironically, the gap mentioned above rears its head in this arena as well. It is not only the doctors and lawyers that require college. So too, do teachers, social workers and various other low paying careers require college. Because of this, college as an investment becomes questionable.
If one had the money that they invested in college to invest elsewhere, they likely would do much better on the whole. With the exception of the really high paying college majors, an investment in the stock market would clearly do better than an investment in college. This is one of the reasons that it is so important to choose your major wisely. If you are choosing a low paying major, then be prepared to lose money on your degree. There are obviously some exceptions to this rule, but you should consider all situations.
So, is a college degree worth the investment? It depends on what you major in. One must also consider the value of a college degree that extends beyond money. You make many contacts in college that are sure to have value. How valuable is a contact that gives you a job in the future? How valuable is the contact that becomes a regular customer or mentor for your future business?
Another benefit to college is quite simply the experience itself. Many lessons are learned in college, including how to manage money, pay your bills and hold down a job. These can be attained in college simply through internships or part time jobs while attending college. This period of adjustment can pay huge dividends after college. It is not a benefit that high school graduates normally get when they skip college. They are usually sent directly into the “real world” to learn.
Overall, a college degree is clearly a great investment. There are some exceptions to this, but they are few and far between. There are very few people, bad economy or not, that would not benefit from a college education.