Is College Worth The Cost? A Definitive Guide to Cost-Benefit Analysis

In the last few decades, earning an undergraduate degree has increasingly become the “normal” and “expected” thing to do. As the percentage of high school graduates who choose to enroll in college has risen significantly, more and more career tracks require a college-level degree. However,tuition costs have also  risen steeply, causing students  massive amounts of debt, or not attending college and thus limiting their career options. So, is college worth that high price tag?

What Does College Cost? 

College costs can vary widely, but what we do know is that you will pay far more for your degree if you choose to attend college in a U.S. private university. In addition to hosting an exceptionally high percentage of the world’s top-ranked universities, the U.S. has the distinction of allowing private universities to charge far more for a degree than any other country. Most countries have university systems in which the government offsets some costs—and the U.S. has many of these kinds of public institutions, too— but the U.S. also has a very competitive private sector, which includes world-famous, name-brand institutions like the Ivy League schools. 

But just how high are the costs for college? That will depend on where you choose to attend—based on your home state, the region your school is in, whether it is public or private, and a number of other factors. Let’s break that down a little more. As mentioned above, the highest ticket prices are usually for private schools, which averaged a yearly sticker price of $36,801. Now multiply that by four  years, assuming you plan to graduate in the typical time frame. That’s a pretty steep price –$147,204 (though you probably won’t pay all of it, as we’ll discuss below). There are also public school options out there, subsidized by the state, and many of these have stellar reputations and top-notch programs too, for example the University of California system. If you choose to attend a public institution within the state where you are resident, you will pay, on average, $10,116 per year. Not cheap, but compared to that private school number, not a daunting figure. Choosing to attend a public school outside of your state of residence, on the other hand, will put you out of pocket an average of $22,577 each year you attend.

Sticker price vs. out-of-pocket costs 

Now that we’ve shocked you with some numbers, we should add a quick but essential note here. While the sticker price of attending college in the U.S. can stiffen your spine, with financial aid, you can lower your out-of-pocket costs significantly. Just as tuition costs can vary widely between schools, so too can financial aid availability. Some of the schools with the highest tuition costs, such as Princeton (a whopping $51,870 in tuition and fees), offer need-based grants to the vast majority of students (60% at Princeton), and the average need-based award actually exceeds the cost of tuition, putting a little money back in your pocket to cover living costs. A U.S. citizen student with excellent grades and a below average household may well find that an Ivy league is her cheapest option! Make sure you research the individual schools you are interested in to find out not only what their on-paper price tag is, but how generous they are with financial aid. This can make all the difference when it comes to your out-of-pocket costs for attending school, or the debt you walk away with at the end of four years.

What Does College Provide?

Now that we’ve talked about what college will cost you, let’s talk about the sweeter end of the deal—what are you getting for all that dough? 

Career Opportunities

The most obvious benefit of attending college is that it will open up a whole world of career possibilities. Depending on your career interests and the major (or majors) you choose to pursue, earning an undergraduate degree is the first major step toward becoming a professional. College usually lands you in what the economy would consider “white-collar” work—work in an office, a lab, at a school, or otherwise in an environment and in a role requiring a higher level of education and professionalism. If that appeals to you generally, or you already have a particular career track in mind, from engineering to teaching to finance, then college is an essential first step. 

In addition, it’s important to note that those with a post-secondary degree earn significantly more than those without one, so if your goals lie in a more materialistic direction, college is an important albeit expensive investment toward that goal. On average, in 2011, those with an undergraduate degree who worked full-time earned $21,100 more than those with only a high school diploma. Keep in mind that you have to not be afraid of career transitions as well. Your earnings will, of course, depend on your area of study and the career track you enter upon graduation, but whether your goals are as simple as earning money, or whether you want to pursue a passion for a particular industry or career, college is an essential bridge to those ambitions.

Exploration and Self-knowledge

Another oft-touted benefit of attending college is a little less concrete but can be equally valuable. In college, particularly a U.S. college, you will have the opportunity not only to study within your particular field of interest and intended career, but to explore other areas of knowledge. In fact, most universities in the U.S. will require you to complete a certain number of “humanities” or “liberal arts” credits, essentially forcing you to explore topics outside of your intended major. These often include foreign language, history, literature, and science courses that you are required to complete before graduating. While you may resent the mandatory nature of these courses at first, these are a great opportunity to broaden your horizons. You might be surprised how enjoyable that medieval English literature survey course is, or how often you refer back to insight gained in that intro to neuropsychology course.

Outside of the opportunities to explore various subjects and courses, most colleges offer a vast array of extracurriculars and student activities to get involved in. Whether you want to continue to improve your fencing skills, take up the intense sport of ultimate frisbee, or get involved in student government, you will benefit in innumerable ways from these outside-the-classroom self-development opportunities.

Life skills

Just as you will benefit from opportunities for exploration during your four years in college, you will also develop life skills essential to becoming a successful, professional adult. Whether it’s learning to manage your personal finances, or discovering how to network as a professional, advocate for yourself, or take on a leadership role, college is your proving ground for the adult world.

What Alternatives to College Are There? 

Even though you can always avoid college budgeting and scholarship scams, if you still aren’t sure if college is for you, there are great alternatives that will allow you to avoid the cost of college and can still set you on a successful career track. If you are not academically inclined but have passion and skill for a trade, technical and vocational schools are a great option. Depending on your chosen profession, you will spend less money and less time in training before you can begin your career. There are many options within this track, from becoming a contractor and building homes to becoming a paramedic and saving lives. 

If you are academically inclined and want to further your studies but aren’t quite ready for the commitment and cost of a four-year college, local community colleges are a great alternative. If, after a year or two, you decide college is for you, you can work on a transfer application, with the advantage that you will only need to spend two- or three-years’ worth of high-cost tuition. Or, you can graduate community college with an associate degree, which will still help you land certain jobs for which a high school diploma just won’t cut it. The average income of those with an associate degree as of 2008 was $42,046.

Finally, if the U.S. system—whether because of the academics or the high cost—simply doesn’t appeal to you, consider taking your studies abroad. Attending school in another country comes with a host of benefits, not the least of which is (usually) significantly lower tuition. However, don’t forget to factor in higher travel costs and the emotional toll of being far from family, friends and familiarity. This option is not for everyone. 

At the end of the day, if you are looking for a path into a white-collar career or a particular field, then college is almost certainly a necessary, if costly, step. If you are worried about paying off student debt, choose a practical major that will more or less guarantee a solid return on your investment. Computer science, engineering, health, and business are all good bets. Or, if you are going to college to pursue a passion such as art, literature, or teaching, know that unless you are lucky enough to get significant financial aid, you may carry your student debt with you for a long time. However, if that passion is what you want to shape your life around, then the debt may well be worth it!