Wednesday, February 15, 2017

What's A College Degree Worth

Student loans represent an incredible burden on young people but at least the debt if applied wisely has a purpose.  It is what I call investment debt.  It is debt a person invests in themselves that hopefully earns a return over their lives.  Above you can see expected lifetime earnings for each degree that a person earns.  Somebody with a masters or doctoral degree earns over three times what somebody that leaves high school without a degree can expect to earn over their lifetimes.  

In that instance, and for example, a student completing a graduate degree could finish with $200,000 in student loan debt.  Assuming they possibly taking 30 years to pay off the loan and even with amassing perhaps $400,000 in total costs after the interest is paid would still see a return on their investment of many times over their cost.  

Back Friday.


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