Appraising the Value of a College Degree in Dollars + Related Factors
Degree Economics: WTH is a Bachelor’s Degree Worth?

I’m a dollars and cents kind of guy and I like to cut the fat. I’ve always been told that an education is the surest investment that I’d ever make because it’d pay off in spades. I can say with absolute confidence that it is total BS after experiencing 14 different professions from the lowest levels of manual labor to sitting behind a desk at a white-shoe firm.

The value of degree is relative to the following factors:

(1)	The Major
The major is going to determine the future employment options available and the salary associated with that job.
Ex 1: A degree in accounting will allow you to become an accountant (duh).
Average starting salary: $55,000 for an entry level accountant.
Ex 2: A degree in biology will allow you to become a researcher or a future in medicine.
Average starting salary: $42,000 for an entry level research associate.

(2)	School’s Reputation or Network Related to that Concentration
Most people don’t realize that an entry level position is usually easiest to come by, when we’re still in school. Almost every Fortune 500 company is associated with one school or another. These companies have specific schools where they give preferential treatment (thus a higher chance of getting a job). So, the school’s reputation or network is going to be a huge factor in whether or not you even get the opportunity to interview with a company.

(3)	The Cost
Tuition has risen more than double the inflation rate, since 1986. Education doesn’t come cheap these days and it’s a huge factor in whether a degree is worthwhile.
Ex: Bob goes to Harvard (tuition alone: $35,568 and with estimated living costs: $59,680. Bob is going to have $142,272 in student loans after he graduates (assuming he never sleeps, eats, or buys books). If Bob gets a job that earns $49,945 a year out of college (the median income for an entire family in the United States before tax), then he would be able to payoff his student loans in about 3 years (again, assuming he never sleeps or eats).<p>Realistically, Bob is going to pay the following for living expenses excluding all luxuries.

Federal Tax:	$6,843
State Tax:	$4,995
Rent:	$10,644 ($877 per month for an one-bedroom)
Food:	$2,400 ($200 per month maximum monthly foodstamp allowance)
Total:	$24,882 to survive per year.
Income: $49,945 Median US income for an entire family (husband and wife)
Expenses:	$24,882 to survive per year
Leftover:	$25,063 to pay student loans per year with no social life.
Student Loans:	$142,272 ignoring accumulating interest
Leftover:	$25,063

It will take Bob about 5 and a half years to payoff his student loans at Harvard. Had Bob went to a public school; he would’ve paid $28,080 total ($7,020 per year) and been out of debt after about a year.

Conclusion:
Education is a lucrative business and colleges have an awesome business model. It’s similar to the United States Treasury, they both print money!

I’ll be providing bi-weekly updates on what a college degree is worth on various majors and professions in dollars and cents. Also, I will follow-up with the present value of the value future earnings as well.

*Figures are based upon data provided by the United States Census.

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