Career and Business Essentials - Are College Costs Worth It?

Stephanny Chavez

Career and Business Essentials

Professor Raleigh

Article Hunt #3

Are college costs worth it? How ability, major, and debt affect the returns to schooling  by Douglas A. Webber . This article examines the financial value over the course of a lifetime of pursuing a college degree under a variety of different settings like their major, student loan debt and the individual ability. I account for ability bias and the probability that entering freshmen will not eventually graduate. I find the financial proposition of attending college is a sound investment for most individuals and cost scenarios, although some scenarios do not pay off until late in life, or ever. I estimate the present discounted value of attending college for the median student to vary between $85,000 and $300,000 depending on the student’s major.  It seems that colleges and universities know how much employers look for employees with a college education. Both the American public and the college administrators are aware of the effect a college education has on a person's financial success later in life. Knowing how much people value higher education, colleges are constantly pushing the envelope, seeing how much they can squeeze out of their students. In response, students are forced to apply for financial aid. Some people respond to the rising cost of college by saying that people get paid more than they used to, that salaries are higher and so college being more expensive makes sense. However, the increases in the average costs for college have outstripped pay increases for individuals and families. Better career counseling in secondary school would go a long way to making sure that those who go to college have a real use for it.

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