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NextGen Magazine

 
 

Federal Reserve Study Finds Rate of Return on Bachelor's Degree Slightly Down, But Degree Still Highly Valuable

By:
Chris Gaetano
Published Date:
Jun 7, 2019
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With the costs of college education rising, the Federal Reserve Bank of New York said that the rate of return on a bachelor's degree is slightly down but, despite this trend, a degree remains a highly valuable investment for one's future. 

"In recent years, the average college graduate with just a bachelor’s degree earned about $78,000, compared to $45,000 for the average worker with only a high school diploma. This means a typical college graduate earns a premium of well over $30,000, or nearly 75 percent," said the Fed report. 

This is about $5,000 less than it was in the year 2000. Percentage-wise, the rate of return is just under 14 percent, which is 2 percent lower than it was "over the past several years." The Fed contrasted this with the long-term rate of return on stocks, 7 percent, and bonds, 3 percent. So, while the overall rate has decreased slightly, investing in one's own education is still a good idea for most people. 

The Fed study did add the caveat that its figures are based on the experience of the average college graduate. Another Fed study previously found that college does not appear to have paid off for roughly the bottom 25 percent of those who made the investment.