ERIC Number: EJ1161873
Record Type: Journal
Publication Date: 2018
Abstractor: As Provided
An Empirical Investigation of the Financial Value of a College Degree
Lobo, Bento J.; Burke-Smalley, Lisa A.
Education Economics, v26 n1 p78-92 2018
We generate selection-adjusted NPV and IRR estimates for a bachelor's degree in the U.S. which account for time-to-graduation, debt financing and tuition levels. We find that a college degree is generally worthwhile, but the private value of the investment is a declining function of time-to-graduation. Selection-adjustments show that for students at the lower end of the ability distribution and in some areas of study, a college degree may never be a good financial proposition; as such, we provide breakeven thresholds for tuition at which college remains viable. Debt financing generates higher returns but greater risk compared to self-financing.
Descriptors: Higher Education, Educational Attainment, Bachelors Degrees, Tuition, Debt (Financial), Educational Finance, Risk, Student Financial Aid, Salary Wage Differentials, Time to Degree, Majors (Students), Statistical Analysis
Routledge. Available from: Taylor & Francis, Ltd. 530 Walnut Street Suite 850, Philadelphia, PA 19106. Tel: 800-354-1420; Tel: 215-625-8900; Fax: 215-207-0050; Web site: http://www.tandf.co.uk/journals
Publication Type: Journal Articles; Reports - Research
Education Level: Higher Education
Authoring Institution: N/A
Grant or Contract Numbers: N/A