When you are deciding whether or not you want to go to college, the Return on Investment (ROI) for attending will be something that you should seriously consider.
While college degrees are required in many fields and industries, it is still possible to find an entry-level position and climb your way up the ranks without a post-secondary degree. Because of this fact, it is important that you assess how much your degree costs you to obtain and then how much you will earn with it to uncover its worth in your professional life.
Read on to find out what is considered when someone is calculating the ROI of a college education.
What Types of Numbers Do You Use to Calculate ROI?
There are two different numbers you will need to take a look at when you are assessing ROI. First, you need to really look at the cost of a college degree. After you have this figure, you will also need to take a look at how much you will earn following graduation. If you have have a decent estimate of the two, you can easily see how long it will take you to pay for your college education in the form of a higher salary, but it is important to remember that salary may be measurable, but there are other benefits that aren’t as measurable.
Assessing the Cost of a College Education
The cost of tuition has grown by over 1200% within the last 30 years. Since a college education is anything but affordable, it’s time to price out how much you will really spend on a college education. Remember, there are several different types of financial assistance that you can qualify for that will drive down your out-of-pocket expenses.
It is best to use the net cost of a college degree to weigh the ROI. This is the total cost minus the federal grants, state assistance and scholarships that you receive. Based on the statistics published by the U.S. Department of Education in the College Affordability and Transparency Center report, the average net cost is $25,588 per year for a Bachelor’s degree.
Comparing the Cost of Education to Potential Lifetime Earnings
Once you graduate from school, your lifetime earning potential goes up significantly. You are not guaranteed to earn more with your Bachelor’s degree, but data shows that graduates average about $51,206 per year. Over a course of 40 years, the data shows that you will make an average of $2,048,204 with your Bachelor’s compared to $1,116,600 that a high school grad earns. Since you will make almost $1 million more, it is fair to say that the tuition fees were well worth the investment.
Degree holders also have more opportunities and can land a job more quickly than someone with only a diploma and experience. You will also enjoy more job stability in today’s unstable marketplace.
As you can see, in most cases, it is beneficial to pay the opportunity costs to get your degree. By doing this and committing yourself to your job search, you will enjoy a healthy Return on Investment (ROI).