Is College Worth It? Examining the Return on Investment for College Degrees

With student loan debt in the U.S. now approaching a staggering $1.8 trillion, more and more people are questioning whether the rising costs of college are worth the investment. While the price of obtaining a degree continues to climb, the financial return of attending college remains a valuable consideration for many students. So, is college worth it?

According to new data from the Federal Reserve Bank of New York, a college degree still provides a substantial return on investment, particularly in certain fields. On average, college graduates earn about $32,000 more annually than those with just a high school diploma. The return on a college degree has remained relatively stable for decades, hovering around 12% to 13% per year.

The Impact of Major Choices

Not all degrees offer the same financial returns, however. The report highlights fields such as engineering, math, computer science, and business as offering some of the highest annual returns. For example, graduates with a degree in math, computers, or engineering see an average return of about 18%, while health science graduates can expect a 14% return. On the other hand, liberal arts majors see a much lower return of around 8%.

College’s Long-Term Salary Boost

The financial benefits of college aren’t just seen in the first job after graduation. The real value of a degree becomes evident over a graduate’s career. A typical college graduate makes about $80,000 annually, compared to $47,000 for someone with only a high school diploma. As college graduates progress in their careers, their wage advantage over high school diploma holders grows even further.

Jaison Abel, a microeconomist at the New York Fed, emphasizes that the value of a degree isn’t about the immediate salary after graduation but the long-term benefits throughout a person’s career.

Graduating Students Want a Solid Salary

As students prepare to graduate, many are looking for jobs that offer competitive salaries. A 2025 survey by Monster found that 62% of graduates consider salary the most important factor in their first job. Only 12% said they would be willing to accept an unpaid internship, and 49% would not take a job that doesn’t offer competitive pay and benefits, a 5% increase from the previous year.

While students are prioritizing higher salaries, it’s important to note that landing that dream job right out of college is often a challenge. According to career experts, it may take time to find the perfect job. Emily Levine, executive vice president at Career Group Companies, states that while many graduates may not secure their ideal role immediately, it’s important to be patient and take advantage of entry-level opportunities to gain valuable experience.

Addressing the Student Loan Crisis

Despite the clear advantages of earning a degree, many Americans remain concerned about the rising cost of college. A 2024 report from the think tank New America found that over 80% of Americans believe the cost of college is the primary factor preventing students from enrolling.

Phillip Levine, an economist at Wellesley College, suggests that much of the public’s frustration stems from the perception of skyrocketing college costs. However, the benefits of a college degree are often not fully communicated, he says. Many students receive more financial aid than they expect, and the net cost of college may be significantly lower than the published “sticker price.”

The Case for Better Price Transparency

Leaders in higher education agree that colleges need to improve their communication regarding the true cost of attendance. For example, Princeton University has started to provide clearer cost estimates on its website, showing that despite an $82,650 annual tuition and fees, the average student only pays about $10,650 after grants and financial aid. Other schools are beginning to follow suit, offering tools like the “Instant Net Price Estimator” to give families a clearer idea of what college will actually cost based on household income.

Mitchell, president of the American Council on Education, emphasizes the need for colleges to communicate the real value of education, not just the price tag. “We need somebody smarter than I to figure out a way to communicate price that is encouraging rather than discouraging,” he said.

Looking Ahead: Is College Still Worth It?

Despite concerns about the high cost of education, the return on investment for a college degree remains strong, particularly for graduates in high-demand fields like engineering, healthcare, and technology. While some students may face significant debt, the long-term financial rewards of earning a degree are clear.

As higher education continues to evolve, the focus must shift toward transparency in pricing and ensuring that students and their families understand the true costs and benefits of a college education. For many, the decision to attend college remains one of the best investments they can make for their future.