NEW YORK – Some comforting news for recent college graduates facing a tough job market and years of student loan payments: That college degree is still worth it.
Those with bachelor’s or associate degrees earn more money over their lifetime than those who skip college, even after factoring in the cost of higher education, according to a report released Tuesday by the Federal Reserve Bank of New York.
The study, by economists Jaison R. Abel and Richard Deitz, also found that a degree is still a good investment for college grads whose jobs don’t require college. About a third of all college graduates remain underemployed for most of their careers.
A person with a bachelor’s degree can expect to earn about $1.2 million more, from ages 22 to 64, than someone with just a high school diploma, the report said.
And someone with an associate degree will bring in $325,000 more than someone with a high school education.
The study used data from the U.S. Census Bureau and the Bureau of Labor Statistics.
Rising tuition costs, surging student debt levels and an increase in unemployment rates among new grads since the recession have caused some to question the value of higher education.
The New York Fed study is just the latest to say that a degree is a good investment.
A Pew Research Center report this year said young adults with college degrees make more money, have lower rates of unemployment and are less likely to be living in poverty than those whose education ended with high school.
The New York Fed report said that between 1970 and 2013, those with a four-year bachelor’s degree earned an average of about $64,500 a year; those with a two-year associate degree earned about $50,000 a year; and those with a high school diploma earned $41,000 a year.
After subtracting tax benefits and average financial aid awards, the researchers said that a bachelor’s degree cost about $122,000 in 2013, while an associate degree cost $43,700.