With rising costs and the amount of planning involved to prepare for college, some parents and students may wonder if earning a college degree is worth the investment.
Research from The College Board considered this question and found that a higher education has a significant positive impact on an individual’s financial, social, and overall well-being.
The report, “Education Pays,” found that individuals with college degrees earn more and are more likely to be working in a job that offers benefits such as retirement savings and health insurance.
While many families likely believe that a college graduate can earn more in the workplace, they may be surprised by how much more. In 2015, the median earnings of a worker with a bachelor’s degree were 67% higher than the earnings of a high school graduate. Also, the unemployment rate for those who went to college was 2.6% on average, compared with a rate of 8.1% for high school graduates.
The College Board also analyzed the impact of higher education on individual lifestyles and wellness. Nearly 70% of 34-year-olds with a bachelor’s degree reported that they exercise at least once a week, compared with 45% of high school graduates. Also, the research found that college graduates volunteer more frequently and are more likely to vote.
Paying for college
Despite the lifetime benefits, the challenges of preparing for and funding a higher education can be overwhelming. Consulting with a financial advisor can be an important first step. With many choices for saving, such 529 plans or custodial accounts, seeking expert advice can help families establish a plan. Equally important to saving is having a plan for spending down college savings when tuition bills are due. For more information on college savings strategies, read Putnam’s investor education article, “Strategies to make the most of college savings.”