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Is College Still Worth It?

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Abstract

A college degree was once viewed as a surefire ticket to a good job and a clear pathway for upward mobility. However, concerns about the rising cost of college and the struggles of recent college graduates to find good jobs have led many Americans to lose confidence in higher education. This shift in sentiment has become even more widespread since the pandemic, as opportunities and wages have grown for those without a degree as labor markets strengthened. Indeed, many have been left wondering whether college is still worth it. In a two-part blog series, we offer an economic perspective on the value of a college degree, updating our previous research and analysis. This first post examines the costs, benefits, and return for the typical college graduate. We estimate the return to college at 12.5 percent, a rate well above the threshold for a sound investment. Our second post looks beyond the typical graduate and finds a college degree might not be worth it for at least a quarter of college graduates.

Suggested Citation

  • Jaison R. Abel & Richard Deitz, 2025. "Is College Still Worth It?," Liberty Street Economics 20250416a, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:99863
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    More about this item

    Keywords

    college degree; human capital; college wage premium; returns to education; higher education;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I2 - Health, Education, and Welfare - - Education

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