We are all too aware that the minute we buy a car and pull out of the dealership parking lot, our car has already significantly depreciated in value. But do we think about the value of education the minute the tassel is moved from right to left on the graduate’s cap and he or she leaves campus for a career? Education pays. It’s that simple.
The ROI of higher education
Statistics show the more you learn, the more you earn. 2018 data from the Federal Reserve Bank found college graduates earned weekly wages that were 80% higher than high school graduates. The Bureau of Labor Statistics reports that people with a bachelor’s degree have median weekly earnings of $1,173, compared to just $712 a week for those with a high school diploma. Workers with an associate’s degree also earned more, with median weekly earnings of $836.
Not only do college graduates earn more, but they also pay more taxes and are more likely to be employed. Those with a bachelor’s degree had an unemployment rate of 2.1% in 2018, while the Bureau of Labor Statistics reports that 4.1% of people with a high school diploma were unemployed.
Yet there’s more than a financial benefit to higher education. Good colleges also produce happy, healthier and more engaged individuals. According to a study published by JAMA Internal Medicine, college graduates typically have healthier habits, work in occupations with healthier working conditions and have better access to health care. A study by the University of Maine found that college students also volunteer at a rate 2.3 times higher than those with a high school diploma or less. And the satisfaction that comes with living to one’s full potential is immeasurable. We have to ask ourselves: What are the wider societal benefits of higher education?
All debt is not created equal
The average student loan debt per graduate in the United States was $17,126 in 2017. But not all student loan debt is created equal. The level of student borrowing is often described as a crisis, but a look at the latest data from the U.S. Department of Education provides a more nuanced picture of the borrowers who are facing the greatest trouble.
The biggest debt holders are not the students who attend the nonprofit private institutions such as Valparaiso University and public institutions, but those who go to for-profit colleges. These students account for only about 13% of all college students, but they are responsible for more than half of all student loan defaults. By contrast, this compares with a default rate of 12% of public college attendees and 14% of nonprofit college attendees. At Valpo, that default rate is 3.1%, which is well below the national average.
Though the case for a college education is a compelling one, the rising cost of college is a concern. Educators appreciate the generosity of alumni and others who donate to scholarship funds and build our endowments. Universities and colleges also benefit from tax dollars and community investments. These all serve to mitigate the impact of tuition costs and enable students to fulfill their dreams.
Given the substantial investment of time and resources by students and parents, colleges and universities have the responsibility to invest in programs that meet the real-world needs of students. We need to pay attention to the skills today’s students require to succeed. Employers are looking for candidates who will be able to solve problems, make sound decisions, communicate ideas effectively and contribute to diverse teams. At Valparaiso University, by combining a liberal arts education with professional training, we seek to lead and serve in an increasingly complex and diverse world.
Higher education attainment isn’t just about the money — it’s about enriching lives and, in turn, our society. It is about opening up minds and worlds of opportunity that only education can provide. It is a lifelong investment with lifelong dividends. As citizens of Northwest Indiana, we all benefit by the investment that students have made in themselves and in our communities. As educators, we take the responsibility seriously that higher education delivers a strong return on investment — in all its dimensions.