Is College Worth It? Part 1

Is College Worth It? · Part 1

The "Do No Harm" earnings test goes into effect in July 2026, and it's prompting a lot of questions about the value of a college education. It also narrows the focus specifically to earnings: If a degree gets you a job that pays more than you would earn with just a high school diploma, the degree was "worth it." But that narrow framing misses some of the biggest considerations students should be taking into account when determining whether or not to pursue college. This four-part series asks—and attempts to answer—the key questions students should be asking to determine the value of college right now:

• Is college right for every student right out of high school?
• When does the debt outweigh the prestige?
• Does what I want to study affect whether and where I should go to college?
• Where's the real salary and placement data?

Is college worth it? If you're asking whether a college degree will result in a higher-paying job over time, the answer is yes. The data has proven time and time again that college graduates have greater long-term earnings potential and that employers want college degrees. A recent massive study of over a million college graduates in Texas revealed that, 15 years after graduation, bachelor's degree holders earned over $86,000 more than those without a degree. (And that's after accounting for tuition and debt.)

So why do people keep asking this question? Maybe it's because even though a college degree is the right career move for most people eventually, it's not the right answer for everyone at 18. Perhaps the real question we should be asking is not whether people should go to college but whether college should be the first stop for everyone after high school graduation.

The Cost of College

College is an investment. The average cost of a four-year bachelor's degree (including tuition, fees, and room and board but before financial aid) is $243,680 for a private nonprofit school and $103,400 for in-state tuition at a public school. Even after factoring in financial aid, full-time students paying in-state tuition at a public school are paying, on average, $85,360 for four years. At private schools, that increases to an average of $149,520. Nearly half of public and private school students take out loans. The average debt for the class of 2024 (both public and private graduates) was $29,560, and 47% of students graduated with debt.

Many students don't fully understand the financial investment they're making when they attend college. Students estimate they'll graduate with just a little over $16,000 in debt, which is around half of the national average. Tragically, students with the lowest financial literacy are the ones who generally graduate with the greatest amount of debt. They are also the ones who are most likely to underestimate what they'll owe monthly after they graduate, which can make financial planning after graduation challenging.

Starting college—and even taking on debt to do so—is also no guarantee a student will finish with a degree. Only 61% of the matriculating class of 2019 graduated in six years, a statistic that has held consistent for the past four years. Nearly a third of non-completers (28% on average) still have student loan debt, and they are in a much weaker position to pay off that debt than their credentialed peers. A Department of Education study revealed that, 12 years after matriculation, students who graduated with a degree had paid a little over 40% of their student loan balance while those who had never graduated still owed 84%.

Getting the Most out of College

When the average cost of college is greater than the down payment on a half-million-dollar house, it's more vital than ever that students are in a position to get the most out of the experience. Especially if they are taking on debt, students should have a clear sense of what they're going to do and its associated opportunity cost. And yet the majority of college students are (understandably) still making up their minds about who they want to be and where they want to go. College students are likely to change their major—exploration is, after all, part of the point of going!—with nearly half of the 1.4 million students who matriculated in fall of 2017 and graduated by summer of 2024 reporting changing their primary major at least once.

Exploration is a good thing, and, fortunately for any student graduating with a bachelor's degree, any major should pay off over time. But there's no question that some degrees pay off more than others, and that becomes relevant when students are considering how much debt they can or should take on and how they will be able to pay it off. Fifteen years after graduation, an engineering major can expect to have earned more than $200,000 more than someone with a high school diploma. A liberal arts major can expect more modest gains of $35,410 in that same time period. Both majors can lead to good and stable careers, but students should be factoring the opportunity cost and payoff into their decision-making. This is also a place where colleges and universities can support students through better career advising and clearer pathways to connect programs to specific careers.

Nothing Is Guaranteed

This year's graduates are confronting a challenging job market, fueled by uncertainty about how AI is changing our jobs as well as an equally uncertain economy. The challenges presented by AI are new and uniquely of our moment, but bachelor's degree holders have been struggling with underemployment for decades. The Federal Reserve Bank of New York points to an underemployment rate of around 42% for recent graduates and 34% for all graduates. What's interesting here is that neither of those stats have moved by more than a few percentage points since 1990.

What has changed since then is that high school students are doing more and more to prepare for college—taking more AP classes, doing more homework, and participating in more extracurriculars—only to find that their degree is not landing them in a high-quality job. As Noam Scheiber describes in his book Mutiny: The Rise and Revolt of the College Educated Working Class, even jobs college graduates have fallen back on that do not require a degree—Starbucks barista, Apple Store "Genius"—have lost much of their allure as those companies rolled back predictable working hours (Starbucks) or became more traditional sales floor work (Apple). This shift would be disillusioning for any employee, but it's especially tough for today's graduates. They have worked harder than ever to attend college and have taken on more debt than ever before to support those aspirations, and as a result they expect a greater payoff. This is one of the core tensions fueling questions around the value of attending college at all.

Adults Who Wait

It would be disingenuous to claim that delaying college solves all these problems. In fact, completion rates for those who start college at 24 or later are at 50%, about 10 percentage points lower than their younger counterparts. This is likely due to the profile of the typical working adult—they are often juggling other priorities. Nearly half of enrolled college students over the age of 30 are also working full-time, and 60% of those same students have at least one dependent. Those factors are generally cited as reasons why completion rates have been lower. That said, as more working adults return to college, these statistics may change. A recent study of these populations finds that persistence rates may be improving. Although the study has a small sample size (students at the University of Kansas and Florida International University), researchers found that those adults were more highly motivated to persist because their prior work and life experience makes them better prepared for the rigors of their coursework.

Delaying college also results in an opportunity cost in missed wages. Adults who delay college don't experience the bump in earnings from going to college until they actually complete their degree, which leads to lower lifetime earnings in that field. That said, over time the average hourly wages of all college completers converge, regardless of when they complete their degrees. Adults who wait to start their degree still see the salary boost from their credential, and that boost is commensurate with the boost they would have seen had they started their degree at 18. The overall return on investment for college at any age—and therefore the impact of this opportunity cost—differs tremendously based on major. Students who delay college but pick a major with a higher return on investment may see greater returns if they would have selected a different, lower-earning degree path had they enrolled immediately after high school.

A question that merits further study is whether adults who delay their degree are more likely to choose degrees with higher earnings potentials than the ones they would have chosen if they had started college at 18. The current data suggests that they are more likely to choose majors closer to applied careers (majors like health professions, engineering, and business), which makes sense given that the vast majority of them are working while in school. As more adults start or return to college, it's important to understand more about how working adults choose their area of study and how their work and life experience impacts their decisions.

When to Choose College

So is college the right choice at 18? The answer remains complicated because it's highly individualized. If nothing else, the data shows that college is not a decision that should be made lightly or as a de facto next step following high school. Ideally, a student matriculating at 18 would have a clear understanding of the financial decision they are making—including any debt they are taking on—as well as a concrete plan for how the institution and course of study they have selected will prepare them to pay off that debt. Some 18-year-olds will be able to do this easily. Others may be coming from families who are able to pay in full, which may make the financial part of the equation a less consequential part of the conversation.

But 18 may not be the right time for every student to go to college, and high schoolers should know that's okay. Students who are unclear about their path at 18 may be very well prepared with a plan at 20, 25, or even 30. Plenty of people who take on entry-level jobs that don't need a degree find that they actually do want to get a degree in order to advance their current career—or they have the time and energy to focus and think about where they want to pivot and they instead invest in an education that supports that pivot. That's the kind of focused thinking that you can have with perspective and real work experience. Saying no to college at 18 shouldn't be synonymous with saying no to college forever. And for many high school graduates, waiting may be the smarter move to complete a degree that will align with their desired career outcomes.

The question students are really asking isn't whether college is worth it in the abstract. It's whether this program, at this institution, at this point in their life will be worth it for them. Institutions that can answer that question clearly — through programs with strong career pathways, advising that meets students where they are, and credentials that hold their value over time — are the ones students will choose, and complete.

That's the work SRM is built to support. Learn more about our higher education services →

Sources

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