Question: Does a College Degree Pay Off?

Jul 10, 2015
Paying for College, Question of the Day, Research, Student Loans, Current Events, Video Resource

Answer: It depends.

From PBS NewsHour:

Some useful nuggets from the video:

  • 1/4 of colleges have a negative rate of return. In other words, the cost of the school outweighs the benefits (higher salary) earned from attending that school.
  • Three factors that determine the value of a college degree:
    • The school that you attend (presumably cost as well as its reputation/selectivity)
    • Completion rate: will you graduate after 4, 5, 6 years?
    • The job that you are get following college (determined by your major and other factors)

While I don’t agree with the professor’s belief that folks employed in STEM (science, technology, engineering, math) careers are easily replaced by recent college grads, I do think his message that the value of a college degree depends on a variety of factors and that not all college degrees are created equal is a valuable one for students.  I also think the petroleum engineering example highlights the need for students to choose careers that they are passionate about rather than “chasing the money.”

Here’s the PBS NewsHour article that should accompany the video as it draws out several key points that the video glosses over.

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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