Students and parents often wonder whether a bachelor's degree is worth the cost. According to the College Board, annual tuition and fees averaged $8,655 at public four-year colleges and $29,056 at private four-year schools as of October 2012. These costs don't include living expenses and textbooks or reductions for financial aid. Higher education still pays, however, because the average college graduate receives higher yearly and lifetime earnings than a high school graduate.
The average one-year difference in earnings for a college graduate over a high school graduate will pay nearly two-and-a-half years of tuition and fees at a four-year public college. With a high school diploma only, the average full-time worker earned $652 per week in 2012, or $33,904 for 52 weeks, according to the U.S. Bureau of Labor Statistics. Bachelor's degree graduates earned an average of $1,066 per week, or $55,432 annually -- a difference of $21,528 per year. The BLS statistics include only full-time workers ages 25 and older.
A 2012 Census Bureau report estimates the lifetime earnings of American workers by educational level, calculated from 2011 statistics in its American Community Survey. The report predicts $1.371 million in lifetime earnings for a high school graduate with no higher education compared with $2.422 million for a four-year bachelor's degree graduate. This gives a college graduate a lifetime earnings advantage of more than $1 million. All Census Bureau estimates assume continual full-time work for 40 years starting at age 25.
Not all college degrees bring equal financial rewards. The American Community Survey breaks down annual earnings for bachelor's degree graduates by type of major. Full-time employees with a bachelor's degree in science or engineering averaged $66,000 per year as of 2011, while business majors averaged $62,000 annually. Employees with an education major averaged $44,000 per year, while employed graduates in arts, humanities and other majors averaged $51,000. Self-employed workers averaged lower incomes for every major -- for example, $52,000 per year for science and engineering graduates.
A higher rate of employment for college graduates contributes to the lifetime earnings gap between college and high school graduates. In February 2013, for example, only 3.8 percent of those with a bachelor's degree or higher were unemployed, compared with 7.9 percent of high school graduates, according to BLS statistics. Your particular major also helps determine your chances of full-time employment, reports the Census Bureau. Engineering, science, business, math and computer science graduates have the highest likelihood of year-round, full-time work, while graduates in the arts, humanities and education are less likely to have jobs.
- U.S. Census Bureau: Work-Life Earnings by Field of Degree and Occupation for People With a Bachelor’s Degree -- 2011
- U.S. Bureau of Labor Statistics: Education Pays
- U.S. Census Bureau: Field of Degree and Earnings by Selected Employment Characteristics -- 2011
- U.S. Bureau of Labor Statistics: Employment Status of the Civilian Population 25 Years and Over by Educational Attainment
- College Board; New College Board Trends Reports 10/24/2012
- Stockbyte/Stockbyte/Getty Images