Does A College Education Help Your Income?

Students everywhere are graduating, and many students are putting high school into their rear view mirror and looking ahead at the future. As both students and parents prepare for the new school year, millions are asking themselves questions about college.

  • Will I/my child get there?
  • How will we pay for it?
  • And is it even worth the cost any more?

Today, let’s take a look at whether or not college is worth the cost.

Research indicates a college degree still has great benefits for students. A May 2012 report from Rutgers University titled “Chasing the American Dream: Recent College Graduates and the Great Recession” includes some fantastic information about how the economic downturn of the last few years has impacted college graduates.

Their research concluded that a four-year degree does indeed help students make more money upon leaving school, even if the first job the student takes doesn’t require a diploma.

Consider these numbers from their study:

  • The median starting salary for a job requiring a four-year degree was $37,750, and the median hourly wage was $11.00.
  • The median starting salary for a job not requiring a four-year degree was only $32,500, while the median hourly wage was just $10.00.

Furthermore, the median starting salary for individuals that did an internship while in college was $4,000 higher than those that did not, and graduates whose first job was related to their degree earned (on average) $4,000 more than those that left their field of study altogether. Students felt they benefited from their internships as well; 69 percent of students who did an internship felt either extremely or very well prepared for success in their career field, while 57 percent of students who did not have an internship felt the same way.

Clearly those statistics are an indication that spending time in college can mean as much in a young person’s checking account as it can to their maturation as a person. But there are some other pieces from this research that are interesting with regards to paying for school.

Unemployment continues to be a concern, and while the numbers aren’t ideal for college graduates, a four-year degree improves your chances of getting a job.

The Project on Student Debt’s research surrounding the Class of 2010 indicated that the unemployment rate for college graduates in 2010 was 9.1 percent. However, the unemployment rate for 20- to 24-year-olds with only a high school education was 20.4 percent in 2010.

According to the study, 47 percent of those surveyed indicated that parents/relatives helped them pay for college, while another 41 percent said they worked and saved themselves to help pay for their tuition and other college expenses.

Compare those numbers with 56 percent indicating they needed a student loan, and another 55 percent that were able to secure a scholarship, and the numbers show the overwhelming majority of college students are looking to more than one source of funding to take care of their college costs.

Check back here tomorrow for some ideas about how to fund your degree, and some resources to help that process.

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