Is a Bachelor's Degree Worth It? New Study Says Yes... Once You Turn 34
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A college degree pays for itself, new research shows. It’s just a matter of time.
Because of the high cost of attending college plus the years outside of the workforce that it takes for college students to complete their studies, high school graduates out-earn college grads for the first 16 years of adulthood, according to findings from a new study by the nonprofit College Board.
It isn’t until age 34 that graduates with a bachelor’s degree truly start to see the benefit in terms of earnings.
“A college degree is one of the largest investments most families make, and students and families are right to ask what they can expect in return,” Jessica Howell, vice president of research at the College Board, said in a news release Tuesday. “Education remains a powerful driver of opportunity, but there are differences in outcomes.”
The College Board’s analysis determined this by looking at cumulative earnings for U.S. adults at all education levels, while accounting for the cost of attending college.
From 18 to 33, high-school graduates have the upper hand because they started working and earning right off the bat and had no higher education costs, while college students delayed their earnings for four years to complete their bachelor’s degrees — and had to pay those degrees off.
At age 34, high school graduates lose their advantage. By that time, the typical high school grad has cumulatively earned about $476,000, and the bachelor’s degree holder has, for the first time, earned more: $485,000.
Every year following, the bachelor’s degree holder strengthens the lead, and the earnings gap grows. By age 64 — the oldest in the College Board’s analysis — the typical high school grad has earned just under $1.1 million to the four-year college grad’s $1.6 million.
In other words, bachelor’s degree holders typically earn 46% more money in their lifetime than high school grads, even after accounting for the cost of college.
A major caveat
To be clear, the College Board’s analysis makes a few assumptions: that the full-time working age starts at 18 for high school grads and 22 for bachelor’s degree holders. Another assumption is that the bachelor’s degree was completed in four years, totaling roughly $92,300.
In reality, just under half of bachelor’s degree-seeking students actually graduate in four years, according to data from the Department of Education. And not all college students start at age 18, either.
Additionally, the earnings include all majors for college grads, and some majors are far more lucrative than others.
Early-career income (ages 22-27) | Mid-career income (ages 35-45) | Unemployment rate | |
|---|---|---|---|
Computer engineering | $90,000 | $131,000 | 7.8% |
Computer science | $87,000 | $120,000 | 7% |
Aerospace engineering | $85,000 | $130,000 | 2.2% |
Chemical engineering | $85,000 | $135,000 | 4.7% |
Industrial engineering | $83,000 | $100,000 | 4.2% |
For instance, computer engineering majors enjoy the highest wages among all majors for early-career grads ($90,000), and by mid-career they earn $131,000, according to the New York Federal Reserve Bank. However, the unemployment rate among those majors is 7.8%, second only to anthropology majors at 7.9%. For all workers, regardless of education, the unemployment rate is 4.2%.
On the opposite end of the income spectrum, pharmaceutical-related majors tend to earn only $40,000 early in their careers.
Typical earnings for all grads straight out of college are about $46,000, according to the College Board. But New York Fed data shows that recent grads with 17 of some of the most popular majors — including hospitality, education and psychology — earn less than that.
Assuming they find stable employment, computer engineering majors are likely to see the benefit of their degree long before age 34. Meanwhile, a psychology major might not see the perks until their 40s. In the end, though, college grads tend to come out on top regardless of major.
“The question isn’t just whether education pays — it’s which pathways lead to the strongest outcomes,” Howell said. “This report illustrates the importance of where to enroll, what to study and completing a degree in a timely fashion.”
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