College Is Still Worth the Money…If You Can Complete It

Well, no point in spoiler alerts. The title of this article is kind of a giveaway. The numbers say that college students will indeed earn substantially more over the lifetime as compared to those with a high school diploma. But there’s a huge catch. You actually have to finish college and earn your degree to realize the full scope of its benefits. Anything less than that and there’s a good chance much of what you spend on your college education—no matter how enriching—will go to waste.

This might sound a bit harsh. There are, after all, many profitable careers for which a college degree is not required. Likewise, there is some evidence that non-grads with a few years of college experience may see slightly better job prospects than those who enter the workforce immediately after high school. But in the grander scheme of things, what you’ll spend to attend college will simply not provide a sufficient return on your investment if the experience isn’t backed by a degree.

To find out how you can maximize the return on your investment in a college education, check out our answer to the question, How Much Should College Cost?

Otherwise, read on and find out why college completion is so important…

The College Completion Rate Crisis

It’s a wonder that the phrase “four-year college” even remains in use today. It seems a misnomer when describing the pursuit of a traditional undergraduate degree. According to a 2019 report from the National Center for Education Statistics, just 41% of all students will actually graduate in four years. Only 59% of students will complete this process in six years.

This tells us that only a minority of students will graduate in four years and that a staggering 41% of students will not graduate at all. From a standpoint of failing consumers, this is analogous to every single moving company combining to lose all of the furniture a little more often than once every third job.

And not to be grim, but it’s actually worse than that. Let’s presume that the cost of moving has also gone up by roughly 100% in the last 30 years, adjusting for inflation, of course. According to Forbes, in 1989, the average cost of a four-year degree from any institution, public or private, was $26,902 ($52,892 adjusted for inflation). In 2018, the same four-year degree came out to an average of $104,480 across four years.

Evidence suggests a statistically significant number of students are paying tens of thousands, or more, to attend college and are coming away with little more than a few credits and a varsity logo sweatshirt. So what becomes of these college non-grads when they enter the job market?

Is there a benefit to attending college without completing it?

There is some benefit to attending college without completing it, at least insofar as you will earn more and slightly improve your odds of finding sustainable employment relative to those with a high school degree and no college experience. An article in the Journal of Higher Education finds that Using techniques that address selection bias, we find that students with “some college” are considerably more likely to be employed fifteen years after high school graduation and tend to earn significantly more than their counterparts who do not go to college.

The article concedes that While college dropouts do not fare as well as college graduates, incomplete college nevertheless functions for many as a stepping-stone into a better labor market position.

But the truth is, findings on this subject vary somewhat widely. The Journal of Higher Education researchers note that many of the studies preceding their own found contradicting evidence. In some cases, researchers identified modest employment and salary improvements for those who completed at least some college, whereas others asserted that college non-completion offered essentially no wage differential as compared to high school graduation.

So in order to dig a little deeper on the question, let’s examine the matter of salary differential.

What’s the connection between college completion and earnings?

The connection between college completion and earnings is pretty high actually. But let’s start with a look at those who complete high school or earn their high school equivalency. A study published by Northeastern University in summer of 2020, and using pre-pandemic figures, found that those with a high school diploma earned an average salary of $38,792 with an unemployment rate of 3.7%. Evidence suggests that those with some college education but without a degree fared somewhat better in the job market, earning an annual salary of $43,316. However, at a rate of 3.3%, College non-completers were not dramatically different from high school graduates in terms of their vulnerability to unemployment.

Interestingly, those who did complete a two-year program and earn an associate degree earned an average annual pay of $46,124 with a 2.7% unemployment rate. While the unemployment figure suggests further improvement of prospects from an unemployment perspective, the average salary suggests a fairly modest pay bump for associates, as compared to college non-completers.

But here’s where the real bump comes. Those who earned an associate degree earned just under $3,000 more on average than those who earned college credits without completing a degree program. By contrast, those with a completed bachelor’s degree earned an average annual salary of $64,896 and saw an unemployment rate of 2.2%.

Simply stated, while you may see slightly improved earning potential by completing some college courses, as opposed to simply graduating high school and entering the workforce, the difference is marginal. Indeed, the difference may be marginal enough to be absorbed, and even eclipsed, by your loan repayment obligations.

The benefit of both beginning and finishing your college education is self-evident.

What about the associate degree?

On the surface, the associate degree appears to carry only marginally more value than college-non-completion. At a difference of just $2,808, the average salary for those with a 2-year degree may not be dramatically different, but professional opportunities are more widely available. One likely reason the unemployment rate is .6% lower is that the associate degree is a basic threshold for numerous professional opportunities that might not be accessible to college non-completers.

Not only that, but a great many associate degrees are earned through community colleges and online schools specializing in accredited professional credentialing. In most cases, these avenues are considerably more affordable than pursuing a four-year degree at either a private non-profit or public state university. Such is to say that those who earn an associate degree may earn only slightly more than college non-completers, but they may actually carry less student loan debt into their professions.

Indeed, while, for instance, the average annual cost for a four-year public college was $23,705 in 2016-17, and the cost of a private four-year school was $48,865 per year, students enrolled in community college paid an average of $9,674 per year.

Also of consequence, an associate degree can put you in a strong position to return to college for a four-year degree after, or even simultaneous to, accumulating professional experience. This means that those with an associate degree are also likely in a better position to seize opportunities for advancement over time.

If you’re interested in starting here, take a look at the 50 Best Community Colleges of 2021.

The Clear Benefits of College Completion

The benefits of college completion are clear, not just in terms of annual salary differential, but also in terms of both entry-level pay and access to benefits. According to the Association of Public Land-Grant Universities, Today, Millennials with a high school diploma earn 62 percent of what the typical college graduate earns. In 2019, median income for recent graduates reached $44,000 a year for bachelor’s degree holders aged 22–27. For high school graduates the same age, median earnings are $30,000 a year.

And even in the face of the pandemic, those recent graduates with a bachelor’s degree, though still deeply impacted, were significantly more insulated than high school graduates from the wave of unemployment that arrived alongside COVID-19. At the peak of the pandemic recession, young workers with a high school diploma endured a 15.7% unemployment rate while young bachelor’s degree holders topped out at 6.8% unemployment.

The Association of Public Land-Grant Universities also reports that those with a bachelor’s degree are 47% more likely to be provided health insurance through an employer, a fact which can not only figure directly into your household income, but which is also proven to contribute directly to longer life expectancy. In other words, finishing your degree program may actually lead to a longer life!

Choosing Wisely is Everything

Of course, it’s easy to point to this relatively rosy outlook for those with a bachelor’s degree, but what of college non-graduates? Evidence suggests this is an overlooked and underserved cross-section of college students whose investment may have actually backfired.

While a wide range of personal circumstances will play a direct role in one individual’s ability to complete college versus another’s, the path to non-completion often begins with the decisions you’ll make when searching for the right college.

We strongly advise advanced tools like our Custom College Rankings and College Strategist to refine your search and find a school that matches your needs. It’s about a lot more than prestige and ranking. It’s about what you need and want out of your college education. Find a school that is compatible not just with your academic needs and professional goals but your financial outlook, cultural expectations, and your abilities. This compatibility may be the key to completion.

And if you have already accumulated some college credits and you’re thinking of going back to earn your degree, we strongly encourage you to explore online options. The Best Online Colleges offer a wide array of degree completion options, especially for those with some professional experience. You may even be able to parlay some of that experience into additional credits toward completion. Get started today and get your money’s worth out of the credits you’ve already earned!