Skip to content

Should I Go to College? Here’s What Research Shows


Friday, April 26, 2019

By Ray Boshara, Senior Adviser and Director, Center for Household Financial Stability

Like a lot of college-bound high school seniors, my son has until May 1 to decide where he’ll go to college. His cousin is deciding whether to finish the college degree he’s already pursuing since he thinks he can make a lot more money in Ohio’s now-legal medical marijuana industry. Another cousin decided against college altogether because he believes he could do quite well as an HVAC technician in ever-sunny Florida.

My son and his cousins are like millions of kids nationwide asking, “Should I go to college?” They are assessing whether college is worth it, at least economically. That’s no small decision, especially as the cost of college has risen dramatically. A March 2019 release from the Department of Education (PDF) shows that 38.5% of undergraduate students (2015-16) took out loans to help finance their education. And it’s worth noting the vast majority of undergrads received some sort of aid, whether loans, grants, work-study or other sources.

Oren Cass, in his 2018 book, The Once and Future Worker, sees American kids taking paths similar to these young men in my family. He found that:

  • Roughly one-fifth of kids fail to graduate from high school in four years.
  • Another fifth pursue no schooling at all after graduating from high school.
  • Another fifth start but don’t complete college.
  • Another fifth earn college degrees but work in jobs that don’t require one.
  • The remaining one-fifth actually follow the “traditional” high school-to-college-to-career track.

Is College Worth It? It’s Complicated, But Consider These Findings …

Given this range of educational paths, many wonder if college is actually worth it—exactly the question my Center for Household Financial Stability colleagues William R. Emmons, Ana Hernandez Kent and Lowell Ricketts, and several national experts explored at a research symposium last year, titled “Is College Still Worth It: Looking Back and Looking Ahead.”

So, is college worth it? Well, it’s complicated! But a few findings may be illuminating:

  • Overall, education pays. It is associated with, on average, higher income and wealth compared with not going to college.
  • Income premiums (i.e., the additional amount of income compared to someone not going to college) on education have declined some for recent generations but overall remain substantial.
  • Wealth premiums on education, however, have declined more substantially over successive generations and have been especially lower among families born in the 1970s and 1980s.


In other research on the financial returns from college released last year, my colleagues found that, amazingly, your parents’ education is also associated with how much wealth and income you will generate over your lifetime—whether you went to college or not. So even if you feel you’ve made a good decision about whether and where to go to college, how much wealth and income you end up with varies by educational decisions your parents made.

In other words, like just about everything else in life, where you end up economically is a product of both choice and chance. But controlling what you can control matters: If your parents went to college, your expected wealth gets a big financial boost—but it’s larger if you also went to college. If your parents did not go to college but you did, you’re likely to get an especially large spike in your expected income and wealth.

So whether college, commerce or cool air is your path, it’s helpful to know the economic value of a college degree.

Additional Resources

ABOUT THE AUTHOR
Ray Boshara 

Ray Boshara is a senior adviser and the director of the Center for Household Financial Stability at the Federal Reserve Bank of St. Louis. He is also a senior fellow in the Financial Security Program at the Aspen Institute. Read more about Ray's publications.

Tagged ray bosharaoren casswilliam emmonslowell ricketsana hernandez kentcollegeeducationcenter for household financial stabilityhfsstudent loans