Study: The Benefits Of College Greatly Outweigh The Costs, Despite Student Debt

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Robert Donachie Capitol Hill and Health Care Reporter
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Pursuing a college degree is still the one of the most important investments an individual can make, according to a recent study by the Council of Economic Advisers.

The earnings gap between college and high school educated individuals is growing steadily, reaching a climax in the past few years. While college graduates accrue, on average, some $30,000 in student loan debt, they typically earn $1 million or more over their lifetime when compared to those with just high school degrees. Those with Associate Degrees also earn $360,000 more over their lifetime than high school degrees.

Furthermore, the majority of people who borrow money to attend institutions of higher learning are able to pay back student loans over the course of their lifetimes, reports the World Economic Forum.

In current education discourse, much discussion centers on the rising student debt burden in the United States, causing alarm in some quarters.  But alternative explanations reveal that these fears may be unfounded.  Other analysis focuses on the increase in the number of people attending college, which drives up the total amount of student debt dramatically, as well as the average amount of debt it appears each student carries based on this big picture view.

Another very important factor in judging student loan debt is whether the student completed the degree program. Strong correlations indicate that even if students have relatively small amounts of debt, not finishing a program will severely impact repayment of student loans. (RELATED: Grads With Lower Levels Of Debt Are Most Likely To Default).

Some 59 percent of those with student loans “owe less than $20,000 in debt, with the undergraduate borrowers holding an average debt of $17,900 in 2015,” reports the World Economic Forum.

The benefits of a college education are not only financially tangible for proponents; they are measurable in other ways. Economists note that societies with higher levels of college graduates also see “higher tax revenues, improvements in health, higher rates of volunteering and voting, and lower levels of criminal behavior,” reports the Council of Economic Advisers.

Others challenge the positive assessment of groups like the Council, pointing to evidence that post-secondary education is believed to automatically secure high income, and easy hiring after graduation.

Research finds that “the direct effect of having a college degree on job satisfaction tends to be negative,” and this is likely due to the fact that a degree acts to “raise workers’ expectations,” according to a University of Illinois study.

With higher expectations, the worker is likely to remain unemployed longer and view a lower starting salary with disdain, unlike less educated counterparts, according to the study. Critics of student debt also dispute the view that an undergraduate major “plays a significant role in the promotion to the highest levels of corporate leadership.”

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