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Do College Graduates Really Make a Million Dollars More?

By Edited Nov 13, 2013 1 3

One number that gets tossed around a lot whenever anyone asks why they should go to college is the million dollar number. Almost everyone has heard about this report when discussing education in the United States. The story goes that the government did a study, and students who go to college and graduate make over a million dollars more in their lifetime. The problem is, this isn't true.

First, it is true that in general college graduates will make more over a lifetime than high school graduates, but this is not a sure thing and can depend a lot based on the student's actual field of study. Lawyers and doctors will obviously make a lot more than students who major in philosophy, creative writing, or liberal arts. But the million dollar mark is badly misleading, if not outright false. The study that is often quoted doesn't even say a million dollars - it puts the average at $872,000.

That is a lot of money, but it's not a million dollars. There are other things the study doesn't consider, either. For one, it doesn't count any work done until the age of 25. Even a minimum wage job at 40 hours a week with no raises over those four years and no overtime would add over $58,000 to the side of the high school graduate. In addition to this, what about college debt? Student loans are often in the tens of thousands of dollars, and interest adds on even more.

Suddenly college graduates are looking further and further away from a million dollars over a lifetime. The other question that a lot of pro-college sources don't address are whether or not a college graduate retires with more money than a high school graduate. The effect of compounding value in an IRA or other retirement fund can't be underestimated, and if a high school graduate starts one at age 18, that extra 4 years or more (because many college grads don't start a retirement fund right out of college) can mean that even if the high school graduate earns less over a lifetime, they could have more money at retirement.

This doesn't mean that college isn't a good idea, but the way it's being presented as a magic bullet that guarantees more money and a high paying job just isn't accurate for many of the thousands of students who graduate each year. Many college graduates who are deeply in debt may face a hard reality that the high school graduate with a factory job could retire far more comfortably than they do.

Young adults should look at the numbers, the job prospects of the field they want to get into, and have a more realistic discussion of the pros and cons of going to college.



Apr 30, 2010 8:29pm
hey I heard of this guy who is trying to go to university in the states but is from canada. he cant afford it by himself and hes trying to get scholarships etc. he has a website asking for donations to help him get n education....


thats his website. He only asks that you donate a small amoutn and that every little bit will help him reach his goal of going to a good university in the States.

If you can't donate, I suggest you should at least tell other people about it, he sound like a pretty legit guy. I donated! and if you think hes a scam you can meet him on msn or skype! it was cool, I donated to him just cause i thought he deserved it!
Sep 14, 2010 10:04pm
Sometimes I think a college education is not worth that much of money. It takes a few years of working to pay off the college loan
Feb 20, 2013 3:16pm
You make a great point about debt not being factored in.
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