As the college class of 2011 graduates in the aftermath of the Great Recession, some graduates are struggling to find a good job — or any job at all. As a result, many are questioning whether the time and expense of college was worth it. We try to answer this question by comparing the economic benefits of a college degree to its costs, as one would for any other investment. When compared to other types of investments, how does a college degree really stack up?
The answer is clear: higher education is a much better investment than almost any other alternative, even for the “Class of the Great Recession” (young adults age 23-24). In today’s tough labor market, a college degree dramatically boosts the odds of finding a job and making more money.
On average, the benefits of a four-year college degree are equivalent to an investment that returns 15.2 percent per year. This is more than double the average return to stock market investments since 1950, and more than five times the returns to corporate bonds, gold, long-term government bonds, or home ownership. From any investment perspective, college is a great deal.