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Going to college is a huge investment that often requires you to spend a small fortune. While it may seem daunting to take on the task of paying to earn a degree, getting an education can end up paying off for you. That’s because college grads earn more than their peers without this credential.
Just how much more money do college graduates really make? Here’s what you need to know about how getting a degree could affect your personal finances.
College graduates can earn a lot more than their peers without degrees
The table below shows how the income of college graduates compares with the income of those who did not earn an advanced degree. This is for 2022 and is based on data from the Federal Reserve.
| Education Level | Median Income | Mean Income |
|---|---|---|
| No high school diploma | $32,000 | $42,200 |
| High school diploma only | $53,000 | $74,000 |
| Some college | $60,000 | $86,400 |
| College degree | $117,800 | $204,600 |
As you can see, there’s a huge difference in both median and mean income. The typical college graduate earns tens of thousands of dollars more every year, even compared with someone who took some advanced classes but did not earn a degree.
This is extra money that can go towards accomplishing important financial goals, from saving for retirement to buying a home.
Does this mean going to college makes sense for everyone?
Going to college can certainly provide an advantage in terms of opening up doors to higher-income jobs, as the data table shows. The mean and median income wouldn’t be so much higher if a degree didn’t really make a difference in terms of opportunity.
But that doesn’t necessarily mean everyone needs a degree to be successful, or even that everyone should pursue an advanced education. There are plenty of opportunities to earn a good living without a degree, especially if you go into skilled trades or if you become an entrepreneur and have a great idea to run your own business.
You also don’t have to earn a six-figure income to end up with lots of money in your checking account if you save and invest diligently over your career — although having more education can definitely make it easier to find the types of jobs that leave you with spare money to invest.
Still, college is a major investment, with the average cost coming in at $36,436 per year per student including tuition, supplies, and living expenses. And some degrees open more doors than others. So, before you decide if college is right for you, consider:
- How much will it cost you to attend and whether you can afford it
- Whether you personally are likely to do well in a college setting
- The typical average salary for a graduate studying in the field you’re interested in pursuing
- What opportunities would be available to you if you didn’t go to college
If you find that you are likely to earn a good living after college, then it may be worth the investment, given how much more graduates tend to make. But you should go in with both eyes open and make sure the decision to enroll is right for you.
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