College degrees are no longer worth the cost

What's this about?

People disagree about whether college degrees still give students enough value for their cost. Costs have risen, but degrees can still help many people.

What supporters say

• People with four-year degrees often earn more than people who stop school after high school.
• Degree holders usually face less job loss and find work more easily.
• A degree itself seems to raise pay, not just show that someone already had strong skills.
• College can also help health, growth, voting, and chances to move up in life.

What critics say

• A good result for most students does not mean every degree gives good value.
• Tuition, rent, food, and other school costs can make college very costly.
• Loans can leave students with large debt that takes years to pay back.
• The value can change based on the subject, school, price, and whether a student finishes.

The bottom line

College degrees are not always a bad deal. On average, they still lead to more pay and steadier work, but students should think hard about cost and finish school.

College degrees are not universally a bad investment, despite rising tuition and student debt. The evidence shows that college still pays off on average, but the outcome depends heavily on what students study, where they enroll, how much they pay and whether they finish.

The case for

The broadest evidence cuts against the claim that degrees are no longer worth the cost. Workers with bachelor’s degrees generally earn more and face lower unemployment than people whose education ended with high school. Reviews of college returns also typically find that higher education produces a positive average financial payoff over a career (see Figure 1). 1

That earnings gap is not simply because people who go to college were always likely to earn more. Research using changes in earnings around the time people gain credentials, along with studies of how the college wage premium has shifted across groups and decades, suggests that a degree itself contributes to higher pay. It is not a guarantee of success, but neither is the premium merely an illusion created by who attends college. 2

College’s benefits also extend beyond a paycheck. Degree holders tend to have more protection from unemployment, and evidence reviews link higher education to better health, greater civic participation, social mobility and personal development. Some of those wider benefits are hard to prove as directly caused by college, or to put a dollar value on. Still, they mean that judging a degree solely by tuition paid versus starting salary earned can miss part of its value. 3

The central point is that the average college advantage remains real. Government labor-market data and academic research broadly agree that bachelor’s degree holders continue to have better earnings and employment outcomes than workers without degrees.

The case against

But an average advantage does not mean every degree is worth its price. Tuition, living costs, borrowing, graduation rates, expected earnings and loan repayment prospects differ sharply from one college and program to another. Federal affordability evidence and the College Scorecard show that some students pay or borrow far more than their likely earnings can justify (see Figure 3). 4

The biggest danger may be failing to complete a degree. Students who leave college without a credential can still be left with substantial debt, but without the earnings boost usually tied to graduation. That makes noncompletion a particularly costly outcome, especially for borrowers. 5

Even graduates can face a difficult transition into the workforce. New York Federal Reserve tracking has found significant underemployment among recent graduates, meaning many work in jobs that do not typically require a college degree. Weak labor markets can worsen this problem, although the broader employment advantage for people with degrees still persists. 6

Field of study and institution matter greatly. An average premium for bachelor’s degrees cannot prove that every program is a sound purchase, especially when a cheaper training route could lead to similar work and pay. Students considering college therefore need to compare the full cost—including tuition, living expenses, borrowing and income forgone while studying—with likely outcomes for their particular program. 7

The bottom line

The evidence does not support the blanket claim that college degrees are no longer worth the cost for most students. On average, degrees still bring higher earnings and lower unemployment, and those gains cannot be explained entirely by the kinds of people who attend college.

But that conclusion is not a universal recommendation to enroll anywhere at any price. A degree’s value depends on net cost, debt, likelihood of graduating, major, college, local job market and the alternatives available to the student. Many individual choices can be financially unattractive, particularly for students who borrow heavily, do not complete their program, or attend programs with weak earnings outcomes.

Confidence in rejecting the broad claim is high, because government data, peer-reviewed research and institutional analyses point to a continuing average advantage. The main unanswered question is whether that average translates into a positive return for most individual students once their own costs, completion chances and noncollege options are considered.