Major Findings & Recommendations
The authors drew the following lessons: • Rate of return on education: “The best studies suggest that the return to an additional year of school is around 10 percent. If we apply this 10 percent rate to the median earnings of about $30,000 for a 25- to 34-year-old high school graduate working full time in 2010, this implies that a year of college increases earnings by $3,000, and four years increases them by $12,000” (p.1). • Variation by school selectivity: “People who attended the most selective private schools have a lifetime earnings premium of over $620,000 (in 2012 dollars). For those who attended a minimally selective or open admission private school, the premium is only a third of that” (p.3). • Variation by field of study and career: “Even within a school, the choices a student makes about his or her field of study and later career can have a large impact on what he or she gets out of her degree. It is no coincidence that the three schools with the highest 30-year ROIs on the 2012 PayScale list—Harvey Mudd, Caltech, and MIT—specialize in the STEM fields: science, technology, engineering, and math” (p.4). • Variation in graduation results: “Comparisons of the return to college by highest degree attained include only people who actually complete college. Students who fail to obtain a degree incur some or all of the costs of a bachelor’s degree without the ultimate payoff. This has major implications for inequalities of income and wealth, as the students least likely to graduate—lower-income students—are also the most likely to take on debt to finance their education” (p.5). “All of this suggests that it is a mistake to unilaterally tell young Americans that going to college—any college—is the best decision they can make. If they choose wisely and attend a school with generous financial aid and high expected earnings, and if they don’t just enroll but graduate, they can greatly improve their lifetime prospects. The information needed to make a wise decision, however, can be difficult to find and hard to interpret” (p.6-7). (Abstractor: Author).