A recent study on college education found that earning a college degree benefits each graduate $1m more in earnings than a non-graduate according to the Federal Reserve Bank of New York.
Many feel apprehensive about forking over a large chunk of change to attend a university and receive a college degree. In fact, about 31% of millennials regret paying for college instead of securing a job right out of high school, according to Wells Fargo.
Yet receiving a college education won’t hinder your bank account forever. The study shows over the course of their lives, college graduates are bound to recoup all the money they spent getting their degree – and much more.
“Over the past four decades, those with bachelor’s degree have tended to earn 56% more than high school graduates while those with an associate’s degree have tended to earn 21% more than high school graduates,” the report states.
In a college graduates’ lifetime, it is expected that they will earn about $1m more, the Fed said. Those with an associate degree earn about $325,000 more in their lifetime than high school graduates.
However, there is one caveat in this situation: the real cost of college education, according to the New York Fed, is the net cost of tuition and the opportunity cost of lost wages – meaning the money students give up not working full-time while attending college.
While these numbers sound promising in the long term, leaving college to search for work in the current market is not an easy feat, and requires much resilience and patience.
Most U.S. students graduate with about $30,000 in loans under their belts.
The report estimates the total cost of four-year tuition to be $26,000, stating that the net price of a bachelor’s degree is $6,550 a year – well below the annual $14,750 sticker price. At many private colleges, in particular those considered to be Ivy League, the sticker price reaches upwards of $50,000.