Is College Still a Good Investment?

Rising student loan debt balances and stagnant wages among college graduates has many high school seniors reconsidering whether college attendance. Frequent reports highlighting the plight of Millennials to gain financial security commonly grace the headlines. In 2015, the average college graduate left school with $34,000 in debt, with 44% of recent alumni facing underemployment.

The good news is that college graduates continue to out-earn their less educated counterparts over the course of their career, taking in nearly double the wages of those with only a high school diploma. Graduates also have lower levels of unemployment throughout their careers.

Despite student loan debt, college graduates maintain a higher rate of home ownership, with the margin growing among those in their 30’s. Those completing school with debt are slower to purchase a home but maintain significantly higher percentages than among those without a degree.

Most high school counselors advocate college attendance as the single most effective route after high school for achieving financial and job security. Improving education is considered the best way out of poverty and the most reliable path to upward financial mobility. Many parents feel the same way, strongly encouraging young adults to attend college in masses.

The recession between 2007 – 2009 increased college attendance, as young adults, unable to find work, went back to school. Higher levels of attendance lead to more students with college degrees competing for the same job. It raises the bar as a minimum employment standard, a trend making a college education more critical, for even lower paying jobs. The last decade has brought a reduction in the wage premium graduates can expect to achieve after graduation and increased debt loads due to rapidly rising costs.

Despite higher loan levels and lower pay, obtaining a college education remains a strong investment.