College Pays Off, But Not Like It Should

If you are prepared for college-level work, and especially if you intend to major in something in demand in the economy, by all means go to college. The price you will be charged will be inflated, but the investment will still pay off. If you are unprepared for college, however, or plan to major in a field with few job prospects, you should really think twice.

A factoid you might have heard before — the average college graduate makes around $1 million more over her working lifetime than the average person with just a high school diploma — continues to hold. There are lots of caveats — it does not account for the decreased value of a future dollar, investing what would have been tuition money would likely have produced unaccounted-for gains — but it still exists. On the whole, even with an average four-year undergraduate degree running roughly $40,000 to $134,000 in tuition and fees, depending on the type of school, college is worth the investment.

Which is not to say that degrees are priced right. They are almost certainly inflated, fueled especially by federal student aid including Pell grants, loans, and tax-favored savings plans that enable colleges to jack up their prices to capture always desirable revenue, and allow students to pay — and demand — more than they would were they using their own money or funds voluntarily given to them.

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