But when you compare the value of a four-year
degree with other credentials — a high school
diploma, certificate programs and associate
degrees — it still puts workers at an advantage
in the labor market and leads to higher lifetime
earnings, on average.
BACHELOR’S DEGREES ARE TYPICALLY A
GOOD INVESTMENTIf a college degree is an investment, it’s a good
one, according to the New York Federal Reserve.
The annual return on a typical four-year degree
is around 14%, it calculates, well above the
threshold of “good” returns for stocks (around
7%) and bonds (3%).
In dollar terms, graduates with a bachelor’s
degree will earn on average about $78,000
annually, compared with a high school diploma
earner who receives around $45,000 annually,
according to 2019 data from the New York
Federal Reserve.
However, “on average” doesn’t mean that the
return on your education, or college earnings
premium, will always be a gain. Where you
attend school, how much debt you take on,
what you study and where you live after school
all help determine your return. Many of those
factors are influenced by your race, ethnicity
and gender.
YOUR ABILITY TO REPAY DEBT AFFECTS
YOUR DEGREE’S VALUEStudent loan debt is difficult to avoid and even
more challenging to repay. College costs rose
117% from 1985-86 to 2018-19, according to
federal data. Wages, meanwhile, didn’t keep