Is a college degree worth the time and expense involved?
Most people automatically say yes, and in many cases they are right. But do most people answer yes because they are trained to believe a college degree is valuable? Or do they truly believe a college degree is the best guarantee for a high paying job? I’m somewhere in the middle.
Last week I went on the record by stating that college degrees are overrated. It’s not that I don’t believe a college degree isn’t valuable, I do. I have a college degree and I know it helped me get my foot in the door to begin my professional career. But I believe some people overvalue a college degree to the extent that they believe a college degree is required to land a high paying job.
The article I wrote gave some examples of high paying jobs which don’t require a college degree. One example is my friend who is an electrician and owns a small business. He brings in roughly $250k per year without a college degree. While these types of jobs exist or in his case, can be created, they aren’t the standard job for a non-college graduate.
How Much is a College Degree Worth?
A college degree can be worth millions over the course of one’s career. A study by the US Census Bureau showed the lifetime earnings of someone with a high school degree topped out, on average, at $1.2 million. A Bachelor’s Degree brought in an average lifetime earnings of $2.1 million, and a Master’s Degree $2.5 million.
The following infographic shows the lifetime value of various levels of scholastic achievement and related career information.
Infographic courtesy of GoBankingRates.com.
Some degrees are more valuable than others
As you can see from the infographic above, a college degree is one valuable piece of paper. In some cases, it can be worth millions of dollars compared to not having a degree. But it’s also important to take these examples in context.
There are some very low college paying degrees out there which start off in the low $30,000 range and may barely max out in the mid $40,000 range. That isn’t great money if the degree holder had to take out thousands of dollars in student loans to pay for college. That also doesn’t mean you should shoot for one of the highest paying college degrees if that career field won’t make you happy.
It’s also important to note that a college degree isn’t necessary for a high paying career. There are many high paying jobs which don’t require a degree, especially for those who have a skill that is always in need. The key to remember is this infographic represents averages, not absolutes.
The Value of a College Degree
Now let’s talk value. A college degree can be worth much more than the difference in lifetime earnings might suggest. A college degree is required for many jobs, sometimes regardless of whether or not the degree actually applies to the job. College degrees are often used as a screening tool on job applications as a means to more quickly select qualified job applicants. All else being equal, most employers will hire the job applicant with a college degree over the applicant without a college degree.
Take a quick look at the infographic again and you will see that on average, there are fewer unemployed individuals with a Bachelor’s Degree (5.2%) compared to those who have no higher than a high school diploma (9.7%). The numbers decrease with each higher level of education.
The value of a college degree may extend to the alumni network, depending on the school. I know several people who were able to get job interviews simply because of the college they attended. In many, but not all, cases they were extended a job offer. You still need the skills to get the job, but a college degree, especially from the right school, can open a lot of doors.
Choosing a Major: 3 Factors to Consider
We’ve established that having a college degree can make a huge impact to your financial well-being. But only if you choose the right major. While it would be nice to follow your passion, and get a degree in something you love, and that you think would be fun, you also need to look at reality.
Recently, I read an article about the worst college majors for a career. There are majors out there that result in high unemployment and a low salary. That means it’s hard to get a job—especially one that pays decently. With the new career landscape, it’s important that any education you receive is leveraged in a way that is most beneficial, depending on what you hope to accomplish.
Here are some things to consider as you choose your college major:
1. Realistically, What Can You DO With Your Major?
Be realistic about what you can do with your major. Yes, if you choose anthropology as a major you can learn about ancient civilizations. But what kind of career can you realistically expect? How many working anthropologists are there? And, once you get your anthropology degree, what else can you do with it? Does anthropology transfer to other career fields with any sort of ease? According to the article, anthropology majors are 2.1 times more likely than average to be working in retail.
Many people joke about my communications degree, but it didn’t make the list, and you can develop skills that can be transferred to a variety of career fields, from media jobs to PR jobs to freelancing. Think about the reality of what you can do with your major, and how likely you are to find actual work that utilizes those skills.
2. Will You Make Enough Money to Be Worth the Cost?
Another consideration is whether or not you will be able to make enough money to repay your student loan debts. There is a debate going on right now about the worth of a college degree. When you’re done with your degree, will you be able to afford the costs? This question is especially important when you move on to graduate school. You have to ask yourself:
- Can I honestly expect to make enough money to make this worth it?
- Are there really jobs out there in this field?
- Does the potential bump in salary justify the expense?
Some degrees are more valuable than others; that’s just the way it is. The market places a premium on certain skills and education. Take that into consideration as you choose your college major.
3. Will You Be Able to Live Your Desired Lifestyle?
Most people don’t become teachers for the money. Instead, they choose that profession for the lifestyle. Longer vacations for holidays, and summers off, can be a lure for many people. Think about whether or not your degree will help you achieve your desired lifestyle.
Consider, too, that you might be able to enjoy some of your hobbies without getting a degree in those areas. One of the pieces of advice I received in college was this: Choose a major that will make you money, and a minor that you enjoy. I never became a music performance/fine arts major, but I still like music and playing instruments. You can always keep up with your passions on the side if they don’t make sense for your college degree.
Happiness isn’t a paycheck, but a paycheck helps
Now let’s take a look at the last section of the infographic – happiness. I’ll be the first to admit that money by itself doesn’t equate to happiness. But money is essential for modern life – how happy would you be if you couldn’t afford basic food, clothing, shelter, and transportation? Research has shown that a $40,000 salary serves as a baseline to adequately provide these needs along with a sense of security. Obviously, this varies by region and other factors. A college degree doesn’t guarantee a job, or a $40,000 salary. But it makes it easier to land a job and earn a higher salary.
What are your thoughts on the value of a college degree?