What Does A Degree Actually Cost? Is It Worth It? (A Case Study)
Obtaining a bachelor degree qualification is usually a positive step towards an successful and satisfying career but it has significant educational costs that need to be considered. How does the investment in your education actually pay off in the long run financially? This article looks at how much a typical bachelors degree costs how the numbers stack up in the long run.
Firstly, we must look at online bachelor degree costs. The direct cost of education through both traditional schools or online courses can range anywhere from $2000 to $30,000 a year at some high profile private schools. But for the purpose of this article we are going to use an average figure of $6,600 per annum plus another $1000 per annum for textbooks and supplies which brings us to $7600 per annum. For a 4 year course the total cost is $30,400. Lets round that down to $30,000 to keep it simple.
However it is not the direct cost of the education that is the main expense. The major cost (which is not always considered) is the additional cost (or income loss) of the student not working full time while studying. By choosing to go to college or university to obtain a degree the student’s ability to get a start in his or her chosen career is delayed by a minimum of four years. With this in mind the additional cost of lost income could easily add up to over $100,000 while you are studying for your bachelors degree. For the sake of this article lets use $80,000 or $20,000 per annum.
This gives us a total online bachelor degree cost of $110,000. Quite significant money indeed. But does it pay off?
The Pay Off
The US Bureau of Labour Statistics recently published data showing that during the first quarter of 2008 full time professionals with bachelors degrees earned a median weekly salary of $1,108 while workers who only had high school diplomas earned a median weekly salary of $615. However I believe this does not give a true indication of the earnings increase the degree actually contributed to as in general the type of people who earn degrees would probably earn an above average wage with or without the degree. So for this discussion I will increase the non degree income by 50% to account for this which equates to a weekly income of $922.
On this basis the degree holders earn on average an additional $186 per week or an annual increase of $9672. So without taking into account other factors such as taxation and inflation it would take 11 years and 4 months for the initial online bachelor degree cost to be covered by the increased earning potential it provides. Over the average working lifespan of 40 years the degree would have earned an additional $386,880. This is more than three times the additional cost!
Based on this, it is clear that obtaining a degree certainly does pay off financially. However it is also important to remember that education has many other benefits that will enrich your life. These benefits are discussed further in our article titled “Bachelor Degrees – Are Bachelor Degrees really worth it?”
October 21, 2010 by admin