Conventional wisdom is that college is worth the money because it provides a path to considerably higher earnings than usually can be earned with a high school diploma alone. But is that true?

If you are considering attending college, you likely are at least partially drawn in by the prospect of earning more money when you graduate. The College Board, a not-for-profit association, has long contended that college degrees are worth the money because they pay off over high school diplomas to the tune of $800,000 more in pay over the course of a 40-year career.

However, in recent years increasing tuition costs and a difficult job market have called those figures into question. In an interview with Forbes magazine, Mark Schneider, of the American Institutes for Research, called the calculation “a million-dollar misunderstanding.”

Reduced Earnings Still Higher for College Grads

Taking into account the increasing cost of college, student loan debt, and breaks in employment, Schneider estimated that college graduates earn about $280,000 more than high-school graduates. A researcher commissioned by The College Board in 2007 put the figure at about $450,000.

Most researchers agree that college is worth the money, because graduates, on average, do earn more than their counterparts with only high-school diplomas.

One way to make sure that college pays off for you is to take advantage of grants and scholarships when applying. Carefully read the terms of any student loans you apply for to make sure the terms are favorable. And research average salaries in your desired field so you can deicide how much debt, if any, you are comfortable taking on.

College offers more than just a path to a higher salary–it offers a change to learn and grow. A carefully thought out financial plan can help you achieve that.

Sources:
Jennifer Cheeseman Day and Eric C. Newburger • The Big Payoff: Educational Attainment and Synthetic Estimates of Work-Life Earnings
U.S. Census Bureau
Mary Pilon • What’s a Degree Really Worth? • Feb 02, 2010