August 7, 2013

Editorial: College pays off, even for dropouts


---- — In case anybody had any doubts, there is new evidence that college is a pretty good deal. Here’s the surprising part: Any college is a pretty good deal — even if a student doesn’t finish.

It’s been well known for many years that a person with a college degree earns far more over a lifetime than a person with only a high-school diploma.

Current figures indicate that, on average, a person with a four-year college degree earns $32,000 a year more than a person with only high school.

But new figures from the Hamilton Project, a Washington, D.C., think-tank that recently concluded a study on the matter, say a person with some college earns $8,000 more than a person with only high school.

In other words, it’s better to get some college than none at all.

That subject has been debated lately, as a college education has become increasingly more expensive. Some prospective students have decided against going so deeply into debt to finance an education that may not be completed.

New figures from the Project on Student Debt found that two-thirds of the college class of 2011 had debt at graduation — on average, about $26,600 worth.

How is a young person starting out on a career supposed to afford housing, a car, daily expenses — perhaps a family — while trying to pay off that kind of loan?

But the new numbers show that even a partial college education will be rewarded financially. A student who drops out before graduating from college still earns $100,000 more over a lifetime than a student who stops after high school.

Another think-tank study, this one by Education Sector, found the proportion of borrowers who don’t complete college has risen to 29 percent. And those former students had a higher default rate on loans than those who do complete college. Seventeen percent defaulted, compared with just 4 percent of graduates.

People with some college or an associate degree had better employment success. Among them, the unemployment rate was 6.5 percent, compared with the national average of 7.6 percent for people 25 and older.

The rate was 7.4 percent for high-school graduates with no college and only 3.8 percent for those with a bachelor’s degree.

So the lesson here seems to be that high-school graduates debating whether to go on to college or try to enter the labor market — especially now, realizing that investing in a college education likely means accumulating debt — would be wiser in the long run to absorb the cost and try to get that degree.

But, if getting the degree turns out to be too much of a challenge, whatever college credit you can manage will still pay off in raw dollars.