Updated October 30, 2011

Higher Education: Economic Boon or Bubble?

Is College Worth It? A Matter of Degrees, Demographics and Debt
Read more about Student

With the economic downturn of recent years, many Americans are wondering if a college degree is the answer to their employment woes.

If they return to school, will the cost of tuition, books and other school expenses pay off in the end? To answer that question, you have to look at the volume of students, volume of college debt and the resulting employment and earnings figures.

(Click Image to Enlarge)
Infographics: Education Earnings
Infographics: Education Earnings © CreditDonkey

How many?

As of 2010, approximately 61% of Americans ages 25 to 34 had at least some college education. That number has been on the rise and is projected to continue to increase. From 2001 to 2009 alone, the number of high school graduates who enrolled in a 2 year or 4 year university the fall after their senior year went from 62% to 70%.

How much?

As the number of college students and graduates increases, so does the resulting college debt. As of 2010, the amount of federal and private student loan debt in the U.S. reached $830 billion, with the average education debt per individual weighing in at $34,430. But with many students graduating into a job market with very few prospects, an increasing number of individuals are struggling to pay back their loans.

And while 75% of Americans agree that college is too expensive for most Americans to afford, it is projected that the cost will only continue to increase. Current projections show future tuition and fees for the freshman class of 2023 weighing in at a hefty $40,424 (versus the $8,670 for the freshmen starting this fall).

So, is it worth it?

Data has been collected showing the lifetime earnings of individuals based on gender, race and education level. And that data does show that the higher an individual’s completed education, the higher their resulting lifetime earnings will be.

Probably unsurprising to many, the data also establishes that males make more than females. That gap starts to increase when it comes to bachelor’s degrees and beyond. The data also establishes that increased education does not level the income playing field when it comes to race, with White individuals continuing to earn more than individuals of other races.

Ultimately, whether or not college is worth the financial investment is going to vary depending upon the individual student. Many enter college to study a profession they know will not make them rich. But they view the education they gain as worth the cost. Others do see the profitable pay off. Whether or not they would have achieved the same level of professional accomplishments without their college education is largely unknown.

Perhaps what is most important is for families to carefully consider and plan how they are going to pay for the increasing education expenses. Credit cards come with high interest that starts immediately. Student loans have lower interest and the ability to defer payments but still have substantial interest costs over the life of the loan. Thankfully, there are tax-deferred savings options now available to parents with young children that will help off-set the costs for future generations of college students.

(Reporting by Annette; Infographics by Tina; Additional Writing by Meghan)


Student Credit Cards

Infographic: College Expenses

How to Pay for College

There's no overstating how expensive it is to get a college education, and the costs are only going up. Tuition alone can easily surpass $100,000 at a four-year school, and that doesn't include textbooks, supplies, or even food. So how do you ...

Articles on Higher Education: Economic Boon or Bubble?

Comments about Higher Education: Economic Boon or Bubble?
  • Andy Nathan
    on September 2011 said:

    That is an awesome breakdown of how education helps and hurts us. I think one thing to keep in mind is that as we start to increase our spending on education we do it for the job and also the ability to increase who we are as people. For me college developed me personally, so even if I did not use it for a profession I was able to use those skills for other professions as well as in my personal life.

  • Isaac from Florida
    on November 2011 said:

    why are there so many high school drop outs its so crazy

Comments may be filtered for language. CreditDonkey makes no guarantee of comments' factual accuracy. These responses are not provided or commissioned by bank advertisers. Responses have not been reviewed, approved or otherwise endorsed by bank advertisers. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered. Visitors may report inappropriate content by clicking the Contact Us link.

Name
Email (won't be published)

How to Choose a Student Credit Card

As a college student, you want to build credit and make smart healthy financial decisions. With so many credit card offers for college students available, how do you pick the best offer for you?

About CreditDonkey®
CreditDonkey is a credit card comparison website. We publish data-driven analysis to help you save money & make savvy decisions.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

†Advertiser Disclosure: Many of the offers that appear on this site are from companies from which CreditDonkey receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). CreditDonkey does not include all companies or all offers that may be available in the marketplace.

*See the card issuer's online application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However, all information is presented without warranty. When you click on the "Apply Now" button you can review the terms and conditions on the card issuer's website.

CreditDonkey does not know your individual circumstances and provides information for general educational purposes only. CreditDonkey is not a substitute for, and should not be used as, professional legal, credit or financial advice. You should consult your own professional advisors for such advice.

About Us | Reviews | Deals | Tips | Privacy | Terms | Contact Us
© 2020 CreditDonkey