The cost of a college education continues to soar, and the total amount of student loan debt has risen to a staggering $1.2 trillion, causing many people to question whether a college education is worth the money anymore. However, a 2016 report from Georgetown University’s Center on Education and the Workforce1 revealed that college graduates are still landing the vast majority of jobs created in the United States. Of the 11.6 million jobs created since the Great Recession, 11.5 million went to workers who had some college education, and nearly three-quarters of those went to workers who graduated with degrees. The apparent takeaway from the report is that, as expensive as it may be, it still pays to get a college education.

College Grads Earn More, and Now They Work More

That college grads earn more than high-school educated workers has never been in question. The most recent wage gap measure taken by the Department of Labor shows that college grads earn at the median 81% more than those with only high school degrees. The issue up to this point has been the availability of jobs for college-educated workers. Until 2016, high school graduates outnumbered college graduates in the workforce by as much as a 5 percent margin. 2016 marks the first year that college graduates are on top.

College graduates now comprise 36% of the workforce, as compared to high school graduates, who make up 34%. Sixty-six percent of the workforce is now made up of workers with at least some post-secondary education. The turnabout has come as a result of the Great Recession, which decimated low-skill jobs, and the ensuing recovery, which added primarily high-skill managerial and professional jobs.

The job gains for the various levels of education since 2008 break down as follows:

  • Graduate degree holders gained 3.8 million jobs.
  • Bachelor degree holders gained 4.6 million jobs.
  • Associate degree holders gained 3.1 million jobs.
  • High school diploma holders gained 80,000 jobs.

The industries that added the largest number of jobs are consulting and business services with 2.5 million. The occupation with the most demand was management, adding 1.6 million jobs, followed by healthcare professionals and technical occupations with 1.5 million jobs.

Not All College Degrees Are Equal

While the job and wage gap statistics favor all college graduates, the advantage appears to be more heavily weighted toward graduates with certain types of degrees and tilts toward graduates from upper-tier colleges. According to a study by Goldman Sachs2, workers who graduate from lower- to mid-tier colleges earn less, on average, than high school graduates.

Salaries for graduates with degrees in business, math, IT and health care are rising much faster than graduates with liberal arts degrees, and those who graduate from top-tier schools are going to land the better jobs first. According to Goldman Sachs, students who attend a lower-tier school and graduate with a liberal arts degree face the highest risk of a negative return on their investment. As it turns out, many of the low- and middle-skilled jobs that were once filled by high school-educated workers are now being filled by college-educated workers.

What is the Return-on-Investment?

Although college graduates as a whole are more likely to land a job than high school graduates, their return-on-investment may be negative for many years. On average, the breakeven point for college graduates (when their earnings finally exceed their costs) doesn’t occur until they are past 30. As college costs continue to rise, that breakeven point is expected to approach age 40 by 2050. For graduates of top-tier schools paying more than $40,000 per year in tuition, the breakeven point can be as high as 17 years.

Based on these reports, the conclusion one could draw is that, while it can still pay to invest in a college degree, it doesn’t guarantee a favorable return-on-investment. Although workers with at least two years of college education are more likely to find a job, there can be no expectation of quickly climbing the salary ladder except for those with degrees that are in high demand. Still, college-educated workers, regardless of their degree and college pedigree, will have more options and more downside protection than others.


The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.