Controversy Over the True Financial Value of Higher Education
A popular statistic in education circles in the United States is that choosing to complete a college degree instead of going directly to work out of high school ends up benefitting the average high school senior $1 million over his or her lifetime. Data from the U.S. Census bureau seems to confirm this. Charles Miller — who headed Education Secretary Spelling’s Commission on Higher Education — however, disagrees. A new article that appears in Inside Higher Ed examines the competing arguments.
In a public letter to the College Board, Miller argues that the statistics used to arrive at the $1 million figure is based on faulty assumptions and statistical manipulation. “[P]roperly using the present value of the lifetime earnings, adjusted for the cost of going to college and the difference in the number of working years, and excluding those graduates with advanced degrees, calculated at the three percent discount rate used in the report,” he wrote, “produces a lifetime earnings differential of only $279,893 for a bachelor’s degree versus a high school degree!”
Others stand by the million dollar figure - or at least something close to it: “But in addition to shooting the wrong messenger — the College Board’s own report notes that the million dollar figure is flawed, its officials say — Miller himself uses economic assumptions that go way too far in minimizing the personal benefit of a degree.”
Secretary Spelling himself has stood by the million dollar figure in Congressional testimony.
Regardless of the final dollar amount, there is consensus that a college education does still benefit an individual financially. “According to the [College Board's] analysis, a public college graduate breaks even at the age of 33, and a private college graduate at 40.”
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