Chart: College is a No-Brainer, Right?
Above is the sort of chart that drives seventeen million students to college each year and why the rising costs of tuition haven’t put a damper on enrollment numbers. Recently the Federal Reserve of New York published it as part of their paper, “Do the Benefits of Education Outweigh Their Costs?“.
This sort of statistical outlay makes it only seem obvious that going to college pays off. In fact, as the Fed pointed out, on average college graduates will out-earn non-graduates by $1 million dollars over one’s lifetime.
But be careful. Note the word AVERAGE. Any time you see that word, beware the potential effects of the flaw of averages.
The average American household also has 1.86 children and 2.28 cars. And yet no American household really has either of those things. Some have more, some have less.
Likewise, beware that when seeing average wages by graduate numbers you will most likely not achieve this result, either. You will fall higher or lower than the published number. And it’s the low side that deserves a look. Here’s another chart spelling that one out (hat tip Chris Matthews of Fortune Magazine):
Note that over the past 40+ years, fully 25% of college graduates have not fared any better on the whole than just high school graduates. That’s no insignificant number. And we’re talking about people who actually graduated. Add to this the fact that only 36% of those who start college will graduate in four years and the number of former students, graduates and dropouts alike, without any annual benefit to show for it becomes compelling. Add to this the whopping number of students who come out of college with loans and we start seeing many, many disasters in the making. If you go to college for four years and your earnings power doesn’t increase that stings a bit. But if you attend college, then earn as much as a high school graduate, AND have loans to pay you are literally hurt by your experience, year after year.
Don’t get me wrong. My point in all of this isn’t to denigrate the desire to go to college. In fact, I promote it at every turn. But don’t go to college on the sort of false hope the first chart generates and expect that as a direct result of your decision to enroll, alone, you will have the ability to generate a higher annual income. Go instead with your head on and aware of what it takes to end up without debt and/or on the right side of average.