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Going Back To School is a Smart Investment
There’s no question that going back to school is a smart economic decision. In the short term it may involve some sacrifice of time and money, but the long term payoff is worth the commitment. The definition of return on investment (ROI) is: The money gained or lost on an investment relative to the amount of money invested.
With the economy and other investment options still a big question mark in many respects, continuing education remains one of the most sound investment choices you can make. So what is your potential educational ROI?
Harvard economists Claudia Goldin and Lawrence Katz conducted a 2008 study on college graduate earnings versus high-school graduate earnings.
2005 Average Annual Salary of Typical US Worker
High School Graduate $31,500 College Graduate $50,900 That’s 62% more!
So what does this equate to over a lifetime? According to the study, annualized over a lifetime, a college grad earns an extra $800,000 compared to a high school grad. Of course deciding to go back to school can’t be forced into quite so simple a financial equation. You may already have a 4-year degree and may be going back to school to facilitate a career change or position you for a promotion within your current company. While the motivations and payoffs for returning to school vary by individual, the end result always leads to opportunities (financial and personal) that weren’t available before.
Likewise, deciding which school to attend can’t be boiled down to just financial factors. Regardless of the tuition fees, make sure to consider the average class size, accessibility to faculty, program options and student profile. One of your biggest gains of going back to school is often the networking and relationships formed. Calculating the ROI of gaining a lifelong mentor or meeting a contact that opens the door to a new career is immeasurable.
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