Payback

A college degree is worth $831,000

May 6, 2014
May 6, 2014

Yes, college is still worth it.

A new report from the San Francisco Fed crunched some numbers.

The takeaways?

College graduates—those with a four-year degree—earned about 61% more ($20,050) annually than those without a four-year degree in 2011. The premium has averaged around $20,000 for decades. (Though you can see it shrank during the Great Recession, which has been brutal for freshly minted college graduates.)

US-college-graduate-earnings-premium-vs-high-school-graduates-Earnings-premium-of-graduates-of-four-year-college-Vs-high-school-graduates_chartbuilder

For the most recent graduates Fed researchers looked at—those who graduated in the 1990s and 2000s—the college earnings premium started at $5,400 the first year after graduation and rose to $26,800 annually 10 years after workers earned their degrees.

Annual-earnings-premium-for-four-year-US-graduates-1990s-2000s-Annual-earnings-premium-for-four-year-graduates-1990s-2000s_chartbuilder (1)

The Fed study looked at the monetary value of a college degree, not its cost, which has soared in recent years. But the value certainly adds up. What’s the bottom line? Fed researchers write:

If we conservatively assume that the annual premium stays around $28,650, which is the premium 20 years after high school graduation for graduates in the 1990s–2000s, and accrues until the Social Security normal retirement age of 67, the college graduate would have made about $830,800 more than the high school graduate.

Read This Next: The radically sensible idea that’s lowering America’s massive monthly student debt payments

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