Is College Worth the Candle
Is a college degree worth it? Isabel Sawhill, co-director for the Center on Children and Families and senior fellow at the Brookings Institute, says it is not for everyone. According to the center’s newly-released study, the value of a college degree can vary dramatically, depending on factors such as field of study, type of college, graduation rate and future occupation. Given the growing skills gap experienced by many companies at the entry level it may be time for business leaders to weigh-in.
May 15 2013 by ChiefExecutive.net
If a bond paid for itself that quickly, the return would be between 5% and 6% a year. That’s a handsome payoff; stocks have historically returned around 7% a year after inflation. And it says nothing of college’s other benefits, such as enlightenment, fun and higher job satisfaction.
Hough adds two big caveats: The College Board math assumes everyone goes to a public college. Those usually cost less than private ones—often a lot less—and that skews returns higher. The report also doesn’t account for dropouts or extra college years. Only 56% of students who enroll in a four-year college earn a bachelor’s degree within six years, according to a report last year by the Harvard Graduate School of Education.
PayScale, a Seattle data firm, examines the links between pay and variables like colleges and majors. Its analysis, which also ignores dropouts but accounts for students who take longer to complete their degrees, finds an average yearly return of 4.4% for degrees from 853 schools. That assumes students get financial aid, as most do.
Returns vary sharply; they are negative for more than 100 schools and over 11% a year for ones like Harvey Mudd College in California, the Georgia Institute of Technology and the University of Virginia. Dartmouth, Harvard, Stanford and Princeton are over 10%, but so is Queens College in New York—where state residents pay just over $5,000 a year in tuition, versus about $41,000 for Stanford.
The worst returns tend to come from schools whose programs focus on nursing, criminal justice, sociology and education, says Katie Bardaro, an analyst at PayScale. The best returns are often from schools with strong engineering, computer science, economics and natural-science programs.