As tuition continues to rise at our state’s public colleges and universities, questions persist about whether college is worth it.

But a recent study answers those questions with an emphatic and resounding “YES.”

“In return for their investment, students will receive a stream of higher future wages that will continue to grow through their working lives,” says the study of the economic impact of North Carolina colleges and universities by Economic Modeling Specialists International (EMSI).

“The average bachelor’s degree completer from UNC universities will see an increase in earnings of $25,700 each year compared to someone with a high school diploma or equivalent,” the study says.  “Over a working lifetime, this increase in earnings amounts to an undiscounted value of approximately $1,103,440 in higher income.”[1]

The study finds that for every $1 a university student invests in tuition, fees, books, supplies and wages she could have earned working a job, she will see $3.10 in higher future wages.

“The average annual rate of return for students is 13.7%,” the study says.  “This is an impressive return compared, for example, to the less than 1% return per annum that is generally expected from saving money in today’s standard bank savings accounts.”[2]

Similarly, the study found that a student who earns an associate’s degree at a North Carolina community college can expect, on average, to make $10,800 more a year, or $350,951 more in earnings over a working lifetime than someone with a high-school diploma.

For every $1 a community college student invests in out-of-pocket expenses and foregone time and money from a job, she will receive $2.30 in higher future wages, for an average annual rate of return of 12.0%.[3]

Returns for taxpayers

The additional state and local taxes that college and university graduates pay as they earn more means taxpayers get a healthy return as well.

The benefits of colleges and universities to a community are well-documented, from greater incomes and tax revenues, to jobs created by spin-off businesses, to reduced government expenditures on health, crime and unemployment.[4]

The EMSI study calculates that taxpayers see $3.90 in returns for every $1 they invest in North Carolina’s public universities, for a solid average annual rate of return of 11.8%.[5]

For every $1 taxpayers invest in North Carolina Community Colleges, taxpayers receive a cumulative value of $4.10 of the course of the students’ working lives.

“The average annual rate of return is 14.7%, a solid investment that compares favorably with other long-term investments in both the private and public sectors,” the study concludes.[6]

This comes as the Georgetown University Center on Education and the Workforce projects that by 2018, 63% of jobs in the United States will require post-secondary education.[7]

So the payoff from college is clear.  The demand for college-educated workers is clear.  The question, it seems, is whether we’ll provide the supply.