Dollars for Degrees: How Education Pays

Many high school graduates have not planned to continue their education to pursue a four-year college degree. There are at least two reasons cited for not going to university. The first is that it is expensive. The second reason is that it is time-consuming.

However, rather than considering graduation from high school as the end of required education, it is advisable to think of it as the beginning of the educational journey that will help determine your future earnings. Postsecondary education is generally regarded as the passport to better pay and a higher standard of living.

Undeniably, the cost of education is a concern for most students and parents. However, as investments go, pursuing a higher education is one that promises good returns -- it expands the options available to young people and older students for the rest of their lives.

To be successful in the current and future global marketplace, workers must be able to compete with diverse and educated competitors from around the world. "An increasing proportion of careers require Postsecondary education," says Sandy Baum, senior policy analyst with the College Board and professor of economics at Skidmore College in Saratoga Springs, New York. "Many rapidly growing occupations require two-year degrees or certificates ... It is important that all Americans have access to the Postsecondary education needed to provide financially [rewarding] and personally satisfying career[s]."

The U.S. Department of Labor's Bureau of Labor Statistics gives employment projections for the fastest growing occupations for 2006-2016. The listed occupations include network systems and data communications analysts, personal financial advisors, mental health and substance abuse social workers, physical therapists, physical therapist assistants and physician assistants.

These occupations all require, at a minimum, an associate's degree, up to a master's degree. The majority of the positions that require the higher level of education ranked in the very high category for wages earned. For example, individuals with master's degrees employed as physical therapists could earn $46,360 or more in the very high range. On the other hand, the upper-level earnings of home health aides with short-term, on-the-job training are much lower at $21,220.

"Four-year college graduates earn much more, on average, than individuals with lower levels of educational attainment," says Baum.

A U.S. Census Bureau report from January 2008 notes that research shows that "more education continues to pay off in a big way. Adults with advanced degrees earn four times more than those with less than a high school diploma. Workers 18 and older with a master's, professional or doctoral degree earned an average of $82,320 in 2006, while those with less than a high school diploma earned $20,873."

The report also states, "In 2007, 86 percent of all adults 25 and older reported they had completed at least high school and 29 percent at least had a bachelor's degree ... Workers 18 and older with a bachelor's degree earned an average of $56,788 in 2006, while those with a high school diploma earned $31,071."

While it is true that college degrees garner higher wages, certain fields of lower-level training do offer benefits close to, or the same as, four-year college degrees. Another U.S. Census Bureau's report from January 2008 states, "The field of training can sometimes have as dramatic an effect on earnings as the level of education ... Workers who held vocational certificates in engineering averaged about $3,880 a month, which is nearly the same as those with bachelor's degrees in natural science. Likewise, those with associate's degrees in computers averaged about $3,760 a month, which is close to those with bachelor's degrees in education or social science."

However, it's not just about income. Higher education is rewarding in more ways than just monetary benefits. As Baum points out, it's about having an interesting and personally satisfying career too.

In the College Board report entitled Education Pays: The Benefits of Higher Education for Individuals and Society 2007, Baum and Jennifer Ma write, "Salaries are not the only form of compensation correlated with education level; college graduates are more likely than other employees to enjoy employer-provided health and pension benefits. More educated people are less likely to be unemployed and less likely to live in poverty ...

"Society as a whole also enjoys a financial return on the investment in higher education. In addition to widespread productivity increases, the higher earnings of educated workers generate higher tax payments at the local, state and federal levels ...

"Moreover, adults with higher levels of education are more likely to engage in organized volunteer work, to vote and to donate blood; they are also more likely to live healthy lifestyles. College-educated adults are more likely than others to be open to differing views of others, and the young children of adults with higher levels of education have higher cognitive skills and engage in more extracurricular, cultural, athletic and religious activities than other children. In other words, participation in Postsecondary education improves the quality of civil society."

Students and their parents should consult with the school guidance counselor and a financial advisor to explore all available educational and financial options. This way, students can see all their realistic options to maximize their educational and career potential.