I've posted a lot on the benefits of a college degree and how it helps you financially, and here's another piece that reinforces why I do so. This one is from Yahoo and starts with the following information:
According to the numbers, at least, it's still the college degree that's the great dividing line in lifelong economic success. Roughly one-quarter of Americans age 25 and older have attained a bachelor's degree, according to the Census Bureau. Their average earnings were $45,400, compared with $25,900 for a high school graduate. Over an adult's working life, someone with a B.A. earns an average of $2.1 million -- compared with $1.2 million for high school graduates. Those with a master's degree earned about $55,641, or $2.5 million over a lifetime, according to a Census analysis.
Somehow, this topic keeps coming up: going to college helps you earn much, much more during your lifetime. Here are some of the other posts where I've noted this:
In addition, I find it interesting that only 25% of Americans age 25 and older have a college degree. I get a lot of "everyone has a college degree so they aren't worth that much" sort of comments -- yet the facts say that 75% don't have degrees. So while college degrees aren't as rare as they used to be, but graduates are still in the minority.
The piece then goes on to detail something I highlighted in Does an Elite College Really Pay? -- the fact that graduates of elite colleges don't earn any more than graduates of "good" schools. Some highlights:
High school graduates who failed to make the cut can console themselves with the knowledge that, at least economically, they will likely do just as well as their Ivy League peers over time. That's according to a 1999 study conducted by Alan Krueger, a Princeton University economist, and Stacy Dale of the Andrew Mellon Foundation.
While previous research had demonstrated an Ivy League salary advantage, the data were problematic because students who attend more selective colleges are likely to have higher earnings regardless of where they go to school.
Krueger and Dale restricted their study to equally talented students who applied to the nation's most elite institutions and started college in 1976. Some were rejected and attended less selective colleges. Two decades later, the graduates were earning roughly the same income.
The article then goes on to highlight several points I have found true in my life. Here's the first:
And, as Kantrowitz adds: "If you get a PhD. from Harvard, nobody cares if you got your undergrad from Podunk U."
This is the case for me. I got my undergraduate degree at a small, liberal arts school in the Midwest that no one's ever heard of. But I got into a nationally-recognized, top 25 business school and got my MBA. That's all employers needed to know, and I had an easy time getting my first job.
The second point the author makes is that by hard work and perseverance, a graduate from a lower-ranked school can have as much success as one from an elite school:
As for undergrads, Kantrowitz says, "You may have an easier time finding a job if you go to Harvard vs. Ohio State -- on the other hand, Ohio State, UCLA, the University of Illinois, UC Berkeley, and several of the other lower-cost institutions are excellent schools."
I got in the door with my state college degree -- I just had to knock a little harder. But maybe learning to knock harder early in life is good training for the hard knocks you can face later.
This was also true for me. I started out with the same job that people from Harvard, Wharton, and the like were getting -- except that I had $5,000 in debt and they had $50,000 or more! The only difference: they made a few thousand more dollars a year than I did. Five years later, we were all at similar pay levels, with better performers earning the most regardless of what school they attended.
Finally, here's the last observation that I've found to be true as well:
As Taylor told me, "it's all about your own motivation. You may get a job because you had a great resume. But if you're not producing, you can't say: 'But I went to so-and-so school.'"
Once you get that first job, your performance is what matters the most. Yes, your education carries some weight, but the farther you get down your career path, the more and more experience matters and the less and less your degree counts. For more thoughts on this topic, see this post: Experience versus Education: Which Counts More in Career Success?
For those of you focused on saving for college -- any college -- here are some posts from Free Money Finance that could help you:
I would say that homeownership is the great dividing line in lifelong economic success. Buy a home and you will lock in your P&I expense and ultimately dispense with it entirely, as you reduce principal and enjoy appreciation and equity buildup. If you cannot buy a home, it is unlikely you will ever attain economic success.
Posted by: Terry | December 06, 2006 at 06:08 AM