College Offers Better Returns Than The Stock Market, Study Finds | Forbes
Hey students, here’s some food for thought: Is a college degree still worth it? A recent study says yes, even with the rising costs of tuition. Let’s break it down with a Today’s Doughie twist!
The study found that the average return on investment for a college degree is between 9 and 10% per year, considering tuition and other expenses. That’s pretty impressive, especially when you compare it to the average stock market return of 7.58% over the last 50 years. So, investing in your education could be more profitable than playing the stock market!
But here’s the catch: not all degrees are created equal. The study, which analyzed the earnings of nearly six million Americans, revealed significant differences in returns based on college majors. Engineering and computer science majors top the list with a 13% annual return, while majors like education, humanities, and arts have returns of less than 8%. And for men in these lower-return disciplines, it’s even less than 5%.
Interestingly, the study also found that female graduates generally see a higher rate of return than male graduates. This isn’t because women earn more overall, but because the gap in earnings between college and high school graduates is larger for women.
Despite these promising numbers, there’s a downside. The rate of return on a college degree has been slightly declining over the years, from 2009 to 2021. This is likely due to the rise in college expenses outpacing the growth in graduate earnings compared to high school graduates.
So, what does this mean for you? If you’re eyeing a major with a lower return, you might want to consider additional training or education to boost your job market prospects. And for those majors, financial aid might need a boost too, to keep attracting students to fields important to society.
The study’s coauthor, Liang Zhang, suggests that the variation in return across different majors could widen with technological advances. This could have a big impact on higher education and the choices students make about their studies.
Rising Dough
Considering the varying returns on investment for different college majors, how might students balance their passion for a particular field with the financial implications of their choice in an ever-evolving job market?
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