The Federal Reserve examined the U.S. household economic well-being for 2017 and released the results this month. The section on higher education shines some light on statistics about college as well as the value of a college education.
Is College Worth It?
The cost of college has risen increasingly in recent years, but it’s a cost many adults are willing to incur. Approximately one-third of all adults in the U.S. have a bachelor’s degree, and about 70 percent of all adults have taken some higher education classes after receiving their high school diploma, according to the report.
Of those surveyed, 82 percent with bachelor’s degrees claimed to be doing okay or better financially. That’s compared to 66 percent of those who only graduated high school or didn’t receive a high school diploma. Those with an associate degree who are doing okay or better financially is at 72 percent.
While there appears to be a financial benefit to obtaining a degree, not everyone is convinced it’s worth it. Out of the people surveyed who attended college, just more than half said the benefits of attending college outweighed the cost of attending. Approximately one in five said the cost of going to college was greater than the benefit they received. The remainder thought the cost was equal to the benefits.
67 percent of bachelor’s degree holders said that the benefits of school outweighed the cost of their education – compared to only 46 percent of associate degree holders and 32 percent of those who attended college without getting a degree.
Age also matters when it comes to how many people feel their education was worth the cost. Of those who have a bachelor’s degree, older degree holders are the most likely to feel the benefits of having a degree outweighed the price they paid. Approximately eight out of every 10 people who were 50 or older felt the cost was justified by the benefits, compared to only about half of those under the age of 30.
Information About Student Loans
The report also shed some light on the prevalence of student loans and provided information about their repayment.
Out of all respondents who went to college, approximately half ended up taking on debt to pursue their education. Repaying it proved to be challenging for some. 20 percent of those who took on student debt fell behind on their payments. The number of those who have fallen behind on payments increased slightly from prior years. In 2016, it was 19 percent, and in 2015, it was 18 percent.
Interestingly, borrowers who owe the most money are usually the least likely to fall behind on payments. Only 13 percent of those who owe more than $100,000 fell behind on payments in 2017, compared to 27 percent of those who owed under $10,000. This is often attributed to a higher level of education and greater earning potential. Low-balance default is often associated with drop outs struggling to pay back student debt.
The typical person who had outstanding education debt in 2017 owed between $20,000 to $25,000. The typical payment a person who does have student loans must make each month is in the range of $200 to $300.
Author: Mike Brown
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