Is College Worth It?

Is college worth it?  The problem with that question, of course, is there is a huge range of outcomes among all of the levels of education that we recognize in America.  Two students may graduate with the same degree and work in different areas of the same profession.  Two students may graduate with the same degree in different subjects, and one subject earns a lot more (on average) than the other.  Income disparity among majors is something we can look at (and this article on college started to look at the subject), but this article is more concerned with the aggregate results over all educational categories.  Let’s look into it and determine if college is still a good investment.

The Distribution of Personal Income by Terminal Education

This chart breaks down education in the United States into four categories: Those who didn’t finish High School, those that did (including the ‘Some College’ category), those with Bachelor’s Degrees, and those with any degree higher than a Bachelor’s.  The giant peak on the right side is the $100,000+ category.  Data from the Census Bureau.

Income Distribution by Terminal Degree Type (2010, Census Data)

Income Distribution by Terminal Degree Type (2010, Census Data)

Some of the main take home points of the graph:

  • The population without at least a Bachelor’s Degree had a much higher proportion of their population earning under $35,000.
  • The categories “Never Finished High School” and “High School Graduate” approach zero quickly as the income scale increases.
  • There is a huge spike of college graduates – both Bachelor’s and Advanced degree holders – making more than $100,000 a year.
  • Over 25% of those with advanced degrees make 6-figure incomes.

Who Makes Over $100,000?

This next graph takes the proportion of people in the United States who earned income in 2010 and breaks them down by education.  On the same axis it shows the same breakdown, except this time for individuals earning over $100,000.  Check it out:

Proportion of Population and 0,000+ Earners by Education (2010 Census)

Proportion of Population and $100,000+ Earners by Education (2010 Census)


There you have it.  The Bachelor’s Degree and higher crowd dominates the $100,000+ earner category.

Say what you will about subject choice, but people with more education earn more on average – and at every percentile – than those with less education.  The conclusion can only be one thing: College is still worth it.  Just choose your degree wisely (don’t be like Kelli Space).  Even more on that in a future article?  If you ask politely.

Complain/comment/ask for more in the comments!


  1. says

    I believe the education is not worth and the graph is not exactly representative either.

    Because what is it demonstrates? Parents who educated they kids well, hardworking and have certain means put them through college.  This is it.

    As society it is a huge waste, imho. Spending 3-5 years of life and 200, 000 …to exactly what? Than paying 4-9% interest on it for another 10 years?

    Imagine if parent would put exactly the same amount of money, i.e. 200, 000 into a kid retirement plan. At average 5% a year, the money would double in 14 years, quadrupled in 28. At the age of 46 s/he would have 800, 000. At the retirement age – $ 1, 600, 000…..without putting penny in. Do the happy owners of happy degree have it when they retired?

    • says

      I like your style – a bold answer to the question. However, I’ve got to disagree, with caveats.

      The reason college is ‘a problem’ is the fact that people don’t have $200,000 to put towards education. As a result, pricing is a mess for college (just like airlines) and different students pay vastly different amounts due to grants and scholarships. I’m not sure how many middle class families have an extra $200,000 carved out for college they could just shift to another investment.

      And I agree – college is a bad investment for certain majors. Certain majors (STEM, Pre-Law, Pharmacy, Business) do usually require a degree to get a job – and the median/average incomes in the professions they lead to are more than enough to pay back the cost of education. Fine Art, Psychology? Fine majors, if you have a scholarship, grant, or something else which is defraying the huge cost of schooling – but otherwise you will have a hard time justifying the massive purchase.

      So I agree – in part, but I would still encourage people to run the numbers before deciding one way or another. Trade School is still an option, one that is often overlooked as people drive blindly down the college path. Thanks for your comment!

  2. Greg says

    Thanks for the link. I’d never heard the expression “terminal education” before, but I like it. A refreshing counter to (and presumably, the exact opposite of) the “continuing education” that befouls every profession. 

    I think the spike in the graph is a little misleading, because the x-axis stops at $100,000 instead of going to infinity. I’m sure people with degrees outnumber high school dropouts at $125,000, $150,000 etc., but the visual representation wouldn’t be quite as dramatic with a longer graph. 

    That being said, that part of the graph that looks like a gaping mouth (with an upper red lip and a lower yellow lip) is where the Occupy protestors live. Appropriate, if nothing else. 

    • says

      The only problem is ‘terminal education’ has a morbid ring to it – but if it takes off, hey, I’m fine with it!

      I agree completely – the peak at $100K is pretty dramatic (which is nice), but why the Census Bureau stopped at $100K is beyond me. Around 20% of households make more than $100,000 individuals a bit less, but it’s over 10%), and the CPS itself has 6 digits and goes up to $999,999! I blame the lazy Census Bureau. If I get inspired I’ll go run it myself.

      Philosophers ask, “If a tree falls in the forest with no one to hear it, does it make a sound?”. I ask, “if someone in a major with already low job prospects skips class to Occupy something, does it hurt their job prospects?”.

  3. says

    As the college education system is structured today, with its questionable electives (basically a subsidy for tedious subject matter) and its devolution into a ward of the Central State through federally funded/guaranteed student loans, my position is changing towards “it depends”.  Hey, I’m all for taking a strong stand on some issues :-)

    • says

      I always like to weasel out of some of my tough questions too, haha. I’m on your team – it depends on the major!

      You will, however, be happy to know that this Software Engineer got an A- in Art History. Does that make you more or less likely to respect this site? Be honest – or at least say “it depends”, haha. Thanks for the comment!

  4. says

    There are a few that would not fit nicely in this chart though. Namely, those who are worth a few million but do not bring in over 100k in ‘taxable income’. They may or may not have an advanced degree. However, generally speaking a degree is a great tool to get up in the high networth category.

    • says

      Absolutely – but I think when people think ‘no degree’ they point at Steve Jobs, Larry Ellison, Michael Dell, Bill Gates, Paul Allen and Richard Branson not recognizing that those guys are just the exception that proves the rule: most of the higher income earners (draw the line at $100,000, $150,000, or whatever) do have some college education.

      So I can sort of summarize my opinion like this: it’s worth it, but you better choose wisely. College isn’t the deal it once was, but you can certainly use your degree to catapult you into the top earners (assuming you take the right classes!).

      Thanks for your input.

  5. says

    Ah, this is something I’ve been grappling with myself.  I went to community college, then a state college and didn’t have to pay a dime since I got scholarships and grants for EVERYTHING.  I lived at home and took care of my Gram for a time, but came out debt free.  I am now finishing my MA degree and received no funding except from a $500 scholarship from the Masonic Lodge in my hometown but my family was able to curb the costs (with some loans) since undergrad was so darn frugal.

    Here’s the thing- my friend went to two big name schools.  She has an MA and is $120k in debt.  I will have a tenth of that.  It took her 6 months to find a part time job that uses her degree and she’ll be paying off those degrees for the next 25 years but it was her dream to do what she did and hopes to get a Ph.D.  She’s struggling but is happy with her choices- and I say, good for her.  Is that the life for me? HELL to the NO.

    I think a degree is worth it.  Are there guarantees that a certain school will yield a better result than others?  Unless you go to a really prestigious school (I’m talking Ivy League) there are few promises and you have to take that debt risk and hope your networks pay off.

    I regretted my MA degree for awhile but am almost done.  It was expensive (turns out not as expensive as my friend’s MA degree by HALF)  but now I’m glad I survived it…I might have learned more OUT of the classroom simply from being a graduate student than I did in the curriculum, and I realize there are no promised yields for my degree, but hell, I have it.

    College is worth it, but not worth it if you’re $50k in debt at 22 years old unless you know that degree will get you a solid job in a high paying field!

    • says

      I absolutely respect your path – if you can defray the cost of attendance in some way, you will almost undoubtedly come out ahead, no matter what you choose. If someone with a less lucrative major gets a full ride, should I begrudge them their Fine Arts degree? Paying for just room and board means you’ll have a lot less debt on the back end. And how about a cheaper state school? My wife went to a CSU school because she wanted to be an Interior Designer. The tuition was less than her High School…

      Perhaps students just need a rule of thumb – “Don’t take out more in loans than you’ll make once you graduate”. Full stop. Maybe we can play with that ratio, but it feels about right.

      I agree – most schools will teach the same topics, but only a few schools are prestigious enough – either regionally or nationally – to make a huge difference in the job hunt. However, there are hiring systems like the Cravath System (which has spread out of law, for better or worse) which do penalize students from schools not on the ‘list’.

      I’m glad you’re finishing up – even if you do find yourself in a program you regret there are already massive sunk costs. Sunk costs are, well, already sunk… so you can only figure out if it is worth it going forward. If you’re 1 semester away from a degree, you are almost undoubtedly better off with that degree than nothing – but I’m sure there is an exception somewhere (and it probably includes an argument about debt).

      For the record, I had something like $35K in loans at 22. Still, I’d go to USC again in a heart beat (and major in Computer Engineering again!).

  6. says

    Higher education and the costs of it are a necessary evil for an advancing society.  How important are all those fluff courses required by liberal arts colleges?  I can’t remember what they were called, much less what they were about.  But it sure seemed important at the time.  I don’t see colleges cutting the curriculum down anytime soon to alleviate some of the cost.  
    I think more so now more than ever, a bachelor’s degree is just a piece of paper that shows you’re willing to learn and able to put that information to work.  It would be interesting to see the graph in 10-20 years and how big a divide there is between bachelor’s and advanced degrees.

    • says

      “Core electives”. However, they aren’t elective…

      Since the Bachelor’s degree has become the (excuse me, other people seem to think it has become the) gateway to the middle class, I wonder if you’re right and one of the advanced degrees fills that role later.

      If it does I’ll definitely graph the gap!

  7. says

    I wish there were a way to do a study like this without the awful survivorship bias.  I know it’s impossible, but it’d be interesting to see how HS grads with…say, 110-115 IQs compare to college grads with a similar level of intelligence.

    • says

      I’d love to get the data on that – you could do people who got into school and didn’t go or those who got into school and went to technical colleges instead. I have seen a few studies based on ‘got in, went somewhere else’ people proving that prestige doesn’t matter that much… but that’s why I like to point out Cravath to everyone who does give me that study, haha.

      • says

        There was a study about people who went to top schools, and people who were accepted and didn’t go to a top school.  Their earnings were statistically the same; it made no real difference.  Unfortunately, there wasn’t a section for those who were accepted to top schools and didn’t go to college at all.

        • says

          Yeah, and that study was reworked to be even more interesting to us nerds. Mostly… name doesn’t matter, especially if you were ambitious enough to apply to the “name” schools to start. The relationship isn’t perfect, but the NYT guys in that writer can explain it in more detail than me in a comment, heh.

  8. says

    I love the graphs! College is definitely worth it. It give you a leg up on the competition. Even if you have student loan, you would be able to pay it back pretty quickly once you get a good full time job. If you don’t have a degree, then self employment is probably the way to go.

    • says

      You know I love making them!

      Yeah, getting the good job part is the difficult one for some people… like I was typing to Shannyn, someone should come out and toss up a statement like “don’t borrow more than you’ll make on average” or whatever as a rule of thumb. Might save us some disillusioned young adults!

  9. says

    Your graphs highlight a great point.  I’d also mention that the unemployment rate for bachelors degrees and higher is around 4%, versus 9% for the whole country. 

    • says

      All this is true – although I do think for ‘recent graduates’ in the last couple years it’s a bit higher. Point taken, however – less unemployment, more pay is the general name of the game.

      I still hope people choose wisely!

      Thanks for the comment.

  10. says

    I think education is important, very important, however going forward folks are going to have a different view on how to best obtain a higher education.  I believe that undergrad degrees will soon be a commodity, with most colleges effectively “inter-changeable”.   (I concede that the one exception is the quality of job placement capabilities, this will differ by school). 

    In the near future, people will wake up to the fact that an undergrad degree from a state school will pretty much get you the same opportunities as going to private school that is four-times the price.  Looking back, I wish I had gone to state school and not paid student loans for 10 years that came with the private school price tag.  If you are going to spend money, spend it on the advanced degree; the MBA from Columbia is worth a whole lot more than a BA from Columbia. 

    • says

      Hmm, yeah, and you’re bringing up a great point which I know only some people even consider – if you plan on getting an advanced degree, the terminal degree shines brightest on your resume. If you can find a way to economize on your undergraduate work and still get into one of your top choice schools you’re golden.

      Thanks for pointing that out!

  11. says

    For most people a college degree is a good investment however there are many colleges that have dropout rates over 50%.  Combine student loan default and student aid that will never be paid back and the real cost of a degree is much higher, even if that cost is bore by society.

    • says

      Yep, the 6 year ‘no graduation’ rate is hovering around 40%. Once you get to 6 years the odds of finishing up a degree are much smaller…


  1. […] PKamp3 presents Is College Worth It? posted at Don’t Quit Your Day Job…, saying, Not all of my posts are targeted at students, but this one definitely has college students (and, actually, High School students) in its sights: Is College Worth It? I took 210 CPS data and graphed income by terminal education in income brackets up to $100,000+. To make things interesting, I also showed the population wide breakdown… and the breakdown for that coveted $100,000+ bracket. In short? Get a degree. More nuances? Be careful what major you pick, but a degree is still a good deal for many majors… […]