People often argue about the value of a college degree, but the numbers prove that someone with a higher level of education will typically earn more than someone with less education.
An associate’s degree has the highest ROI overall, though other degrees will earn you much more over time.
Remember that each degree major or concentration leads to different job opportunities with different income prospects.
There’s a big debate over the value of a college degree. Some education advocates urge every young person to earn at least a bachelor’s degree. Detractors call college a waste of money.
Rather than listen to opinion, here’s an objective look at the cost of college and the most likely return on your investment.
Average income by education level
The Bureau of Labor Statistics tracks income by education level, which makes it easy to figure out how much you’ll make with a good degree.
As the education level goes up, the unemployment rate goes down until you reach the professional degree and doctorate level.
The correlation here is very clear: More education means you make more money. The only exception is among people with a doctoral degree. Going to the top of the education ranks likely means you will become a teacher or professor. They tend to earn a bit less than someone with a professional degree, but not much.
Medical school, dental school, pharmacy school, and law school have different time and cost commitments. We are going to skip the ROI for these programs because they all look so different. The same is true of PhD programs. And, in those cases, the student also works as a student-teacher at the same time, further blurring the true cost of attendance.
Also, keep in mind that these are averages. Your own personal abilities and skills, the college you attend, your chosen major or concentration, where you live, your industry, and other factors will all play a role in your income.
The „degree cost“ noted in the chart below is a total cost, assuming the same annual cost and the typical number of years to complete. „Total cost“ includes the cost of a required prerequisite degree. You can’t get a master’s degree without an undergraduate degree first.
The cost per year at a two-year public institution was $10,598 per year for 2017-2018. At a public four-year institution, you would pay an average of $26,593 per year. A four-year private college charges an average of $41,468 per year.
For graduate school, you would pay an average of $11,617 per year at a public institution or $26,551 at a private institution.
Foto: sourceNational Center for Education Statistics
Here we assume that graduate students went to a four-year public institution first for a bachelor’s degree. Estimating the cost of professional and doctoral degrees is a bit trickier, as the types of degrees and how they work vary widely.
Which education level has the highest return on investment?
So, which degree offers the best return on investment? Here are the numbers:
Foto: sourceNational Center for Education Statistics, Bureau of Labor Statistics
Given there are many variables and we used a lot of assumptions, I was surprised to see that the education level with the highest ROI is an associate’s degree. The very low cost, despite a much lower lifetime income, gives you a higher ROI.
A bachelor’s or master’s degree from a public college or university are the next best in terms of ROI, but both give you a much higher lifetime income, too.
In absolute terms where you look at the difference in cost versus what you’ll make, a higher education level is better no matter how you look at it.
Results can vary widely
For this analysis, we treated the incomes of public and private school graduates as the same. Results may vary based on the reputation of the school, career office quality, engagement of alumni networks, and other factors.
At the end of the day, your college experience is only as good as what you make of it. You also have to look at the specific degree, as a fine arts major isn’t going to start a career with the same job and income prospects as an accounting major.
But when it comes to the cost of education, on average, it will pay off very well.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.