The Million-Dollar Misunderstanding
We have heard for years about the income gap between high school and college graduates and naturally, we have come to believe that it pays to get a college education. In fact, a 2002 Census Bureau report states the difference between the earnings of an average high school and college grad, multiplied by 40 years results in a difference of $780,000. This figure has been repeated by The College Board and no doubt countless colleges and universities making their case to perspective students. The report is even titled, "The Big Payoff" so obviously there is something to be said for a college education. Right?
Well, maybe not so much. (Don't tell your parents.)
This news is uncovered in The Wall Street Journal. According to Mark Schneider, a vice president of the American Institutes for Research, a nonprofit research organization based in Washington, the gap may not be as big as we thought.
"Dr. Schneider estimated the actual lifetime-earnings advantage for college graduates is a mere $279,893 in a report he wrote last year."
This new figure calls into question the validity of the original claim. If the gap is really no where close to $800,000 or 1 Million dollars, as some other reports claim, then the folks at the Census Bureau have a lot of explaining to do. Schneider notes several flaws in the calculations from the report, namely:
"[T]he income data used for the Census estimates is from 1999, when total expenses for tuition and fees at the average four-year private college were $15,518 per year. For the 2009-10 school year, that number has risen to $26,273, and it continues to increase at a rate higher than inflation."
If the cost of a college education is increasing faster than inflation, what additional expenses are we paying for? And more importantly, are these expenses providing any more value to the students? Unfortunately, the article does not discuss this point but you can be the judge for your own educational experience.