Over a lifetime, college education makes financial sense

The argument

The argument treats the question as an investment calculation and works from the earnings gap a degree is associated with. In the United States the average college-educated worker earns $1,137 a week, while the average worker without a degree earns $678 — a difference of $459 every week, sustained across a working life. Compounded over that span, the gap becomes the figure that decides the question. Workers who do not go to university can expect to earn some $1 million less over a lifetime than their college-educated peers. That is the quantity against which the cost of attending has to be set, and it is an order of magnitude larger than the cost of any degree programme. The comparison is what makes the case. Tuition, living expenses and the earnings forgone during study are real costs, and they fall early, when a person has least capacity to absorb them — which is why the decision feels expensive at the point it is made. But they are one-off costs incurred over a few years, whereas the earnings differential recurs every week for forty or more. A front-loaded expense weighed against a lifelong income stream is the standard shape of a sound investment, and the arithmetic here is not close. The weekly figures also point to something beyond the total. A difference of this size in ordinary weekly pay affects the whole texture of a working life — what housing is affordable, how much can be saved, how exposed a household is to a period without work. The benefit is not deferred to a final lifetime tally; it is present in each pay period. So while the sticker price of a degree is what prompts the question, proponents argue it is the wrong number to reason from. Measured over the period during which the decision actually pays out, college education makes financial sense.

Context

A college degree will allow workers to charge more for their labour once they graduate. Over a lifetime, this pay gap between college-educated and non-college educated workers more than covers the costs of university.

Premises

Counter-arguments

It doesn’t make financial sense for everyone. College students who perform in the bottom 25% of their university class actually have average lifetime earnings that are comparable to those that never went to college. Also, many studies that look at average lifetime earnings are unable to exclusively point to a college degree as being the main reason behind those earnings. College graduates are more likely to be from the dominant racial majority, they are more likely to come from families with significant financial resources, and they are more likely to be among the top performers in their high school classes. The increased lifetime earnings could therefore plausibly stem from racist hiring practices, family connections, or natural ability, not their university attendance.

Rejecting the premises

[Rejecting P1] Not every college graduate earns more than those without a degree. [Rejecting P3] It is impossible to determine whether or not the earning gap was due to their college education.