NEW YORK (MainStreet) — College degrees have earned a bad reputation in recent years as new graduates struggle to find work, but parents and students who forked over six figures for education expenses can take heart: one new study shows that college is still the best investment.
Money spent on a four-year college degree has yielded an average return on investment of 15.2% annually during the previous 60 years, beating out the average returns from the stock market, bonds and housing, among others, according to a new analysis from the Brookings Institution. Stocks, for example, offered an average annual return of 6.8% during the previous 60 years, and housing had an annual return of just 0.4%.
Brookings crunched some numbers and found that the average student today spends $48,000 on tuition and fees for a four-year degree, and forfeits another $54,000 in earnings during the four years they are enrolled, based on the average amount earned by those 18-22 with just a high school degree. That brings the total initial investment for a four-year degree to $102,000.
As the researchers explain, the salary of a 22-year-old with a college degree is 70% higher on average than the salary of a 22-year-old with a high school degree, and this difference persists to varying degrees throughout one’s career, so that over the course of his or her life, the college graduate will earn $570,000 more than the average high school graduate.