Sometimes, a chart can tell one story, while experience tells another. Nowhere is this more evident than in the value of a college degree.
In the accompanying table, you can see potential lifetime earnings by level of education. The chart suggests that a bachelor’s degree is worth $2.8 million over a lifetime, compared with only $1.6 million for a high school diploma.1
But that’s only part of the story.
Headline: Return on Investment?
Subhead: College grads will earn more over their lifetimes, but surprisingly only about half of all college grads find themselves in jobs that require a degree.
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In our other illustration, you can see that nearly half of all college graduates find themselves “underemployed.” This means they find themselves working in jobs that don’t require a bachelor’s degree 1-year, 5-years, and 10 years after graduation.
Headline: Putting College to Work2
Subhead: Employment outcomes by years following graduation:
![](https://cfdinvestments.wpenginepowered.com/wp-content/uploads/2024/07/Picture3.png)
“The fear of the Lord is the beginning of wisdom, and knowledge of the Holy One is understanding.” Proverbs 9:10
Unpacking the Information
The first job is critical: The study found that graduates who start out in college-level jobs after graduation typically remain in college-level jobs. At the same time, those who are underemployed are four times more likely to remain underemployed than graduates who start in college-level positions.
Money matters: Underemployed college graduates earn about $40,000 a year, compared to $60,000 for a grad who lands a college-level job. A $40,000-a-year position is only modestly better than what people with a high school diploma earn. Underemployment is one of the reasons this group may have more trouble repaying their student loans, among other things.
Major influence: Students can boost their chances of landing a college-level job after graduation by selecting an in-demand major. For example, programs with a major quantitative component, such as engineering, computer science, and finance, tend to have lower underemployment rates. The same is true for education and nursing.
Dirty Jobs: If your child or grandchild isn’t afraid to get a little dirty, perhaps they might need some encouragement to consider other career ideas. Mike Rowe, host of the television series Dirty Jobs, gives viewers an idea of what it’s like to work in difficult and messy jobs that most people tend to avoid. You might want to check it out.
Alignment: Mick Owens, author of the popular book, Diamond of Life: The Five P’s of Success and Significance, offers specific guidance for parents with college-bound students. “Find the school offering the kind of degree that best suits your child/grandchildren intellectually and spiritually along with your financial ability.”
Internships: Real-world experience is one key factor in finding a college-level job. Grads who have completed an internship are half as likely to be underemployed after graduation. Hands-on experience gives students exposure to the professional environment, which can improve a resume in the eyes of a potential employer.
College can be a wonderful experience, and we work with many of our clients to develop a strategy that works for the entire family. Knowledge is power, and learning more about the benefits and limitations of higher education can only pay dividends in the years ahead.