Sunday, April 20, 2014
YOLO COUNTY NEWS
99 CENTS

College corner: Why college is worth it

JenniferBorensteinW

By
From page A8 | September 03, 2013 | Leave Comment

After a summer break, I wanted to start the college corner column with a broad topic: Is college worth it?

Parents and students are facing more pressure than ever when it comes to college, which has led many to ask this question. Rising tuition and large student debt loads — an average of $24,803 for fourth quarter 2012, according to New York Federal Reserve http://www.newyorkfed.org/studentloandebt/ — have made many people question whether the cost of a college education is worth the benefit.

Overall, the data show that the benefits from a college education outweigh the costs.

Does that mean that a college degree is necessary for everyone? It wasn’t for Bill Gates, Mark Zuckerberg and Steve Jobs. Of course they are exceptions, but there are many paths to “success.” Getting a college education is just one of them, but it is one of the surest ways to increase salary and employment potential in the future.

Note: Let’s assume for this column that a college education is a degree from a four-year, somewhat selective school and examine more closely the costs and benefits.

There are many beneficial aspects to a college education — knowledge acquired, social connections made, prestige of the degree, the life skills gained from experiencing a new place. But how does one assess the real costs of a college education?

A good place to start is the total cost of attendance which includes tuition, room and board, fees, books, travel, and some personal expenses. Total COA varies considerably depending on the type and location of the college. For example, consider two schools: Cal Poly San Luis Obispo’s COA is $24,119 per year (public in-state, located near Davis); New York University’s COA is $63,537 per year (private school, far away in high-cost area).

Another cost to consider is the opportunity cost or lost wages due to college attendance. Michael Greenstone and Adam Looney of the Brookings Institution’s Hamilton Project calculate an opportunity cost of $49,000 for a four-year degree (http://www.brookings.edu/blogs/jobs/posts/2013/06/07-return-to-some-college-greenstone-looney). Thus, the total COA for four years at our example schools ranges from $145,476 for Cal Poly to $303,148 for NYU.

However, many students do not pay the total COA to attend college. Grants, scholarships and federal and/or state loans offset costs. A good rule of thumb to avoid accumulating too much debt is that a student’s loan-to-debt ratio should be less than half his or her expected starting salary. Compare salary data from different colleges and majors at collegerealitycheck.com or payscale.com.

Do the benefits outweigh this cost?

Benefits realized from a college education include:

1. Good rate of return on investment: The Hamilton Project states that the benefits of a four-year college degree are equivalent to an investment that returns 15.2 percent a year, even after factoring in the earnings that students forego. This is more than twice the average yearly stock market rate of return since 1950.

2. Higher earnings premium: Again, according to the Hamilton Project, college graduates, when compared to non-college graduates, have a higher yearly earnings premium of roughly $30,000 growing to about $500,000 over the course of a lifetime.

Keep in mind though that selection of a major plays a significant role in this calculation. According to a study from the Georgetown Public Policy Institute — http://www9.georgetown.edu/grad/gppi/hpi/cew/pdfs/Unemployment.Final.update1.pdf — engineering continues to be one of the highest paying majors. At the other end of the spectrum are the non-technical majors such as the arts, psychology and social work.

3. Less likely to be unemployed: According to data compiled by Bureau of Labor Statistics, college graduates were unemployed about half as much as those without college diplomas (http://www.bls.gov/emp/ep_chart_001.htm). Additionally, as Catherine Rampell explains in her May 3 New York Times article “College Graduates Fare Well in Jobs Market, Even Through Recession,” the percent of college-educated workers with jobs has risen by 9.1 percent since the beginning of the recession while non-college-educated workers experienced a 9 percent decrease.

4. Positive affect on overall well-being: Research shows that college graduates have higher levels of job satisfaction and make better decisions about health, marriage and parenting. (National Bureau of Economic Research working paper — http://www.nber.org/papers/w15339.pdf)

With all of these costs and benefits to consider, rest assured that if college is your chosen path, there is a right college out there for you. And, if it isn’t, there are many other worthy options.

— — Jennifer Borenstein is an independent college adviser in Davis and owner of The Right College For You. Her column will return to its regular spot on the last Tuesday of October. She lives in Davis with her family. Reach her at jenniferborenstein@therightcollegeforyou.org, or visit www.therightcollegeforyou.org.

————
How they paid
Sadly, many families and students are unable to finance a college education without “overborrowing.” The average percent of total cost of attendance paid breaks down as follows:
1. Grants and scholarships — 30 percent
2. Parent income and savings — 27 percent
3. Student borrowing — 18 percent
4. Student income and savings — 11 percent
5. Parent borrowing — 9 percent
6. Relatives and friends — 5 percent
Source: “How America Pays for College 2013″

————
Resources for the non-college path
Although in general the benefits of a college education appear to outweigh the costs, there are many individual circumstances that make it worthwhile to evaluate alternatives such as travel, work, community college and vocational school. For those not on the four-year college trajectory, consider:
* “Is College Worth It?” by William J. Bennett
* “Uncollege” movement championed by Dale J. Stephens — http://www.uncollege.org
* 20 under 20 “anti-scholarships” offered by Peter Thiel, co-founder of Pay-Pal — http://www.thielfellowship.org

Jennifer Borenstein

LEAVE A COMMENT

Discussion | No comments

The Davis Enterprise does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

News

A springtime ritual

By Wayne Tilcock | From Page: A1 | Gallery

 
Tom Adams seeks Davis school board seat

By Jeff Hudson | From Page: A1

 
Hub of activity: DHS newspaper keeps evolving

By Zoe Juanitas | From Page: A1 | Gallery

Holy fire ceremony draws thousands in Jerusalem

By The Associated Press | From Page: A2 | Gallery

 
Tour renovated YCCC facility Thursday

By Enterprise staff | From Page: A3

 
Tour Davis Waldorf School on Wednesday

By Enterprise staff | From Page: A3

The fifth annual Tour de Cluck is soon to be hatched

By Special to The Enterprise | From Page: A3 | Gallery

 
Ortiz lawn signs available

By Enterprise staff | From Page: A3

Sign up soon for spring cooking classes

By Enterprise staff | From Page: A3

 
Robb Davis team to rally on Saturday

By Enterprise staff | From Page: A3

Steadfast in their support

By Lauren Keene | From Page: A4, 2 Comments | Gallery

 
Yolo Hospice offers free grief workshops

By Enterprise staff | From Page: A4

Sign up for Camp Kesem caterpillar crawl

By Enterprise staff | From Page: A4

 
Quilters gear up for annual show

By Sebastian Onate | From Page: A4

KDVS launches fund drive on Monday

By Jeff Hudson | From Page: A5

 
Calling all Scrabble fans

By Enterprise staff | From Page: A5 | Gallery

League hosts a series of candidate forums

By Enterprise staff | From Page: A5

 
Hub webpage is seeing traffic increasing

By Zoe Juanitas | From Page: A8

Birch Lane celebrates its 50th anniversary

By Enterprise staff | From Page: A16

 
Hotel/conference center info meeting set

By Enterprise staff | From Page: A16

Lescroart welcomes all to book-launch party

By Special to The Enterprise | From Page: A16 | Gallery

 
DEVO set to serve up 14th annual Winkler Dinner

By Enterprise staff | From Page: A16 | Gallery

Learn Chinese crafts at I-House

By Sebastian Onate | From Page: A16

 
Preschool open house set at Davis Waldorf

By Enterprise staff | From Page: A16

.

Forum

Take ownership of your health

By Special to The Enterprise | From Page: B5

 
Reliving the agony and ecstasy of spring

By Marion Franck | From Page: A7

 
Keep your baby safe

By Special to The Enterprise | From Page: A7

Not thrilled with lack of symmetry

By Special to The Enterprise | From Page: A7

 
Core values on campus

By Our View | From Page: A12

Road diet? No, city diet!

By Letters to the Editor | From Page: A12, 4 Comments

 
We’re reveling in our equality

By Letters to the Editor | From Page: A12, 1 Comment

Vote no; it’s fiscally responsible

By Letters to the Editor | From Page: A12, 1 Comment

 
Rick McKee cartoon

By Debbie Davis | From Page: A12

 
Bill is an affront to UC Davis ag biotech and local farmers

By Special to The Enterprise | From Page: A13, 1 Comment

Don’t want to sit in Fix 50 traffic? Consider alternatives

By Special to The Enterprise | From Page: A13, 1 Comment

 
.

Sports

Devils burn up the track

By Enterprise staff | From Page: B1

 
UCD softball shut out by Santa Barbara

By Thomas Oide | From Page: B1 | Gallery

 
Aggie men shoot 9-under, lead own tourney

By Bruce Gallaudet | From Page: B1 | Gallery

Stars shine in Woody Wilson Classic

By Evan Ream | From Page: B1, 1 Comment | Gallery

 
UCD roundup: Aggie baseball swept away by Highlanders

By Enterprise staff | From Page: B2

A’s score 3 in ninth, rally past Astros 4-3

By The Associated Press | From Page: B6

 
.

Features

.

Arts

.

Business

Yolo Federal Credit Union gets WISH funds

By Enterprise staff | From Page: A9

 
PG&E pays taxes, fees to county, cities

By Enterprise staff | From Page: A9, 1 Comment

Will Davis get an Old Soul?

By Wendy Weitzel | From Page: A9

 
Pediatricians, nurse practitioner hired at Woodland Healthcare

By Enterprise staff | From Page: A9 | Gallery

Asian stocks mostly higher after mixed U.S. earnings

By The Associated Press | From Page: A9

 
Davis Roots will showcase its graduating startups

By Enterprise staff | From Page: A14

University Honda wins another President’s Award

By Enterprise staff | From Page: A14 | Gallery

 
Dutch Bros. raises $19,000 for girl with leukemia

By Enterprise staff | From Page: A14 | Gallery

.

Obituaries

.

Comics

Comics: Sunday, April 20, 2014

By Creator | From Page: B8