The cost of
attending a college or university has been heavily criticized, with extra digs
at the retail prices of textbooks and other course materials. In the view of one
economist, though, that expense represents an investment that will pay off
handsomely in the end.
David
Howden, professor of economics at St. Louis University at its Madrid campus,
and academic vice president of the Ludwig von Mises Institute of Canada, an
economics education organization, sifted through data from the U.S. Federal
Reserve related to student-loan debt and adult employment.
Some 70% of
college students graduate with loans, to the tune of $29,400 on average, Howden
noted in an article for the Mises Institute. Most students also “lose” the job
earnings they would have received during the years they were in school. The
total cost, he said, is around $300,000.
“But the
decision to not pursue a college degree and enter the workforce directly also
comes with a cost,” he said. “It seems like a good deal at first, but for most
it means fewer opportunities, less promotions down the line, limited access to
higher-paying jobs, and, ultimately, lower lifetime earnings.”
How much
lower? Howden calculated that today’s college graduates will bring home some
$800,000 more by retirement than those who didn’t pursue higher education.
That’s an average figure.
To Howden,
that’s a pretty good return on investment. “It may seem onerous to pay back
student loans, but the alternative is monetarily far worse,” he said.
