NEBHE examines how more education means more benefits for individuals who earn postsecondary credentials and for the general public …
Despite the alarming and unsustainable rise of college tuition and fee rates, the greatest cost associated with higher education is still the opportunity cost in terms of lost wages, according to NEBHE’s latest report What’s the Value of Higher Education? Insights for State and Institutional Leaders.
The average associate degree holder in New England earns roughly $5,400 (17%) more annually than an individual who does not have an education beyond high school. The corresponding “wage premium” for a bachelor’s degree in the region is even greater: The average four-year college graduate can expect to earn approximately $19,600 (62%) more per year than someone with a high school diploma only.
The new report by NEBHE’s Policy & Research team is the first of a series of reports that takes an in-depth look at the available data for New England to make the case for the value of individual and public investments in higher education. It explores regional figures on attainment, income, unemployment, poverty and civic engagement, among other data points.
In New England and across the U.S., it has never been more critical to hold a postsecondary credential to be able to fully participate in the workforce and earn a sustainable wage. In recent years, a college degree has become increasingly valuable, while a high school diploma has become worth less and less. Yet, today’s incoming college students tend to be more skeptical about the value of higher education, and a 2018 Gallup poll indicates that Americans’ confidence in higher education is dropping faster than for any other U.S. institution. The time is ripe then to reexamine the value of postsecondary education in New England.
Among other key findings in the NEBHE report:
- In New England, approximately 2.5 million individuals between ages 25 and 64 do not have a postsecondary credential (associate degree or higher) reflecting a sunk cost in terms of lost wages. If half of these individuals (1.25 million) earned an associate degree, this would generate an additional $6.7 billion annually in taxable wages across the region. If the same number earned a bachelor’s degree, it would mean an added $17.7 billion annually in taxable wages.
- On average, an associate degree holder in New England can expect to earn $410,582 (17%) more over the course of their career than someone with only a high school diploma.
- The average person with a bachelor’s degree can expect to earn nearly $1.5 million more over the course of their career than an individual without any education beyond high school.
- In January 2017, the average unemployment rate for an individual with a bachelor’s degree or higher was 2.9%, compared with 5.4% for individuals with some college or an associate degree, and 7.4% for those with a high school diploma only.
- At the worst point of the Great Recession, unemployment among college degree holders was lower than it is today for job-seekers with only a high school diploma—even though we are experiencing a prolonged period of record high employment.
There is no way around it: Higher education expands people’s horizons and contributes to a community’s general well-being. It is potentially the key propeller to advancement for most individuals. More education means greater opportunities and benefits both for an individual recipient of a postsecondary credential and for the general public.
Click below to view individual state data used in the report:
Stephanie M. Murphy is a policy & research analyst at NEBHE.