Do College Graduates Really Earn More Money Over Their Lifetime

Once again a popular website has published a story about how much more money college graduates earn over their lifetimes than workers with only a high school diploma.

“The difference between a bachelor’s degree and a high school diploma is at least seven figures over a lifetime”, says Christina Couch from in her article “The Million Dollar Difference of a College Degree“.

Using data from a Georgetown University study, Couch cited several examples where college graduates did “earn” substantially more than their non college educated counterparts. In fact, of the 5 distinct job categories that were profiled in the article, all of them earned at least 1.3 million more in lifetime salary.

Unfortunately, the article fails to consider the opportunity cost of the actual college education expense itself. Instead of paying $75,000 over four years for tuition, room and board, what if you decided not to go to college and went straight into the work force (as this article suggests is possible).

What would that $75,000 grow to over your working lifetime (starting at 18 years old and retiring at 65 = 47 working years) if you instead invested it in a mutual fund earning a realistic 7% return on investment.

A quick entry into Excel reveals this investment would grow to $1,803,428! In other words, you’d actually make $500,000 more over your lifetime by not going to college assuming you can gain employment in the jobs profiled without a college degree as Couch’s article does.

Things are not always as cut and dry as they seem!

4 Responses

  1. CF 3 years ago
  2. Joyce 3 years ago
  3. Cato 3 years ago
  4. Free Money Minute 2 years ago

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