Is a higher education worth the time and money? John’s question and Jane’s answer.

Is higher education worth the time and money? #education #higherEducation
By higher education, we mean any education after High School. Based on 2015 Census report, around 88% of the U.S. population have high school diploma, around 59% have some college or higher degree, 32.5%  have Bachelor’s degree or more. 12% of our population have advanced degree (like Master’s or Ph.D.). While the population with a High School diploma is quite large (although a 100% will be the best), higher degree holding population is drastically small.

Is higher education worth the time and money?

Now the question comes, Is higher education worth the time and money? That is, should people continue with their studies after high school?

It is true that higher education costs money. Student loan is a common source of finance. Most student loans have low interest rates. Moreover, the first installment can be paid after graduation, upon getting a job.

Should one start enjoying life earlier and not worry about student-loans? Oh, Yes. One could start earning right after high school. In extraordinary circumstances, one can earn six figures per year. There are even examples of millionaires who did not have higher education. However, exceptions are never good examples. They are what they are — “exceptions”.

What is the relationship between well-paying jobs and higher education?

Most of the well-paying jobs require completed university education in the shape of a Bachelor’s or a Master’s degree.

Most jobs that pay above minimum salary need one to have a senior high school diploma at the absolute minimum. Nevertheless, in certain areas, experience is valued far greater than education. However, education is critical to get hired in the first place that leads to the experience. Higher education is also necessary for promotion and getting paid more.

The story of John and Jane

Let me describe a hypothetical scenario. John Doe and Jane Doe graduated from the same high school. Upon completion of high school, John decides to go for a job. Jane decides to go for a bachelor’s degree at a state university.

Both John and Jane were born and raised in El Paso, Texas. They decided to stay in this lovely city.

John works at Home Depot as a Sales Associate

After High School, John started to work at Home Depot as a Sales Associate. He earns $11.35 per hour, which is quite impressive because others with a High School diploma work as Cashiers in the same store at $9.82/hour. John’s yearly income, given that he is hard-working and spends 10 hours per day in the store, turns out to be 300x10x$11.35=$34,050. By the way, we are assuming there are 300 working days for John in a year.

Jane goes for a bachelor’s degree

Jane’s decision was to go for university studies. She decided to be a Business major at the University of Texas at El Paso (UTEP). Jane applies for a student loan, which covers her tuition well enough plus she can purchase books.

Jane is as hard-working as John. She decides to go for a part-time job at Lowe’s. Being a full-time undergraduate student, she cannot manage to work more than 20 hours per week off-campus. Since she is part-time, she was not able to get a Sales Associate position, rather she was hired as a Cashier with an hourly salary of $9.82. If she works three hours per day for 300 days a year, the total income would be 300x3x$9.82=$8,838.

Jane can barely make her living with this income but she works longer hours during summer and during other breaks in the Spring and Fall semesters. Therefore, she survives well during her undergraduate studies.

Jane has a student loan of amount $36,000

Jane’s student loan accumulates. It is around $9,000 per year. In-state tuition fee is around $5,600 at UTEP and the rest of the costs involve some fees, books, and supplies. In four years of Jane’s Business studies, her loan accumulates to $36,000. Jane does not have any other loan.

Jane earns a bachelor’s degree

After four years, Jane receives a Bachelor’s degree in Business. She needs to pay off $36,000 of her loan. She does not have any saving. John, on the other hand, saved around $10,000 every year totaling an amount of $40,000 in his savings account.

Jane joins Home Depot as an Assistant Store Manager

There is an opening at Home Depot for the Assistant Store Manager position. Jane applies for the position and with her business management skills, learnt over the past four years, she impresses the interview board. She becomes the Assistant Store Manager of Home Depot.

By the way, the yearly salary of that position is $75,000. Additionally, the job fully covers her health insurance. Jane also receives retirement benefits from the company. She pays her student loan off in a year or so.

Jane goes for a Master’s degree

After a year, Jane decides to pursue a Master’s degree in Business Management at UTEP. Some courses are online, some courses are in the evening. It is hard to maintain a full-time managerial job and continue Master’s studies, but she went up for the challenge and completed her Master’s in two years.

Jane is promoted to a Store Manager

Jane is then promoted to a Store Manager because she is the one who has the degree and she is the one who has the experience. Her yearly salary goes up. It becomes $90,000. By the way, her Master’s education was not free. She paid around $15,000 as the tuition and to cover other relevant expenses. The only difference is that this time she did not need a student loan.

John is wondering

By the way, John is still in the same Home Depot where his hourly salary increased to $14 totaling 300x10x$14.00=$42,000 per year. The job does not include health or retirement benefits.

Last six to eight years have been great. John now wonders occasionally, what if he pursued bachelor’s degree just like Jane of high school, who is by the way The Boss now. It has been too long since high school. Is it too late to have a new beginning? Am I too old to go back to school? Is a degree worth it? John keeps wondering — How much more does Jane earn than John? Maybe, Jane earns only a few thousand dollars more than John. Maybe Jane just wasted her time and money to get those degrees. It is likely that she is still the fool she was in high school.

[stextbox id=”info2″ caption=”The reason of writing this post”]
Through some connections with the University of Texas at El Paso (UTEP), we have come to know that there are alarming number of high school students who do not have much idea of the benefits of higher studies after completion of high school. This post focuses on explaining the income aspect of higher studies but in reality, higher studies enlighten a person and bring the best out of him/her. Higher education does not enlighten a person only, rather the benefits span the future generations.

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32 thoughts on “Is a higher education worth the time and money? John’s question and Jane’s answer.

  1. Very precise and impressive example I had my 14 year old kid read the story and that left a mark in him. I believe in the worth of a higher education. Every night I spare some time for my 14 year old son to talk to him how important life is and how he has the chance and an option to correct the mistakes I have done before. That includes studying hard and aiming for a degree in the future. In as early as 14 years old I made sure this made a mark in his head. To learn and appreciate life and be more responsible. There is more to it than what he has right now and that is through hard work and aim high in everything. That includes academic performance. Before I have always thought that higher education can end you up crazy or dead because it changes your belief and understanding of life. But as life flourish and I get to understand what everything is worth for. I come to realize that best education and higher learning is the only thing I can give to my son because we don’t have any treasure or wealth that he can acquire. Except the knowledge that will bring him far in the future.

  2. The story of John and Jane is very convincing. My wife has a master’s degree in Education, she teaches in a college. If she just had Bachelor’s degree, she would be teaching in high school. If she had only high school degree, she would be a kindergarten instructor. A Higher degree means a better job, better in terms of money and prestige.

    1. Yes, I agree with you. This is the general scenario. There are exceptions but exceptions are never great examples although people like to refer to exceptions as common cases.

      Thank you for visiting and commenting. Have a great day.

  3. Higher education is really important now. If you finished college and have diploma you will have greater chance of getting higher pay Job. Education is the best gift parents can give to his/her children and if your parents are really doing their best and their hard work we must study hard and set a goal to achieve it. Earning a college degree is the most common pathway to a better career. Attending college is a major commitment of time and money, but it is also a down payment on success. Earning your college degree will help you realize your goals in your career as well as life in general.

    1. Thank you for the added thoughts. Definitely, education is one of the greatest gifts parents can give to their child.

  4. Here in my country, most high school students proceed to go on a higher education. Unfortunately, jobs here even if you have a bachelor’s degree don’t pay enough for one to live comfortably. Parents work their ass off to pay for their children’s’ university education, but it’s too hard for graduates to find good paying jobs here, so many opt to work in other countries. I’m not saying higher education is not worth it in my place, rather, what I’m pointing out is here, if you want to have a future, you have no choice but to get one, even if there is no real assurance that you can actually earn good money despite that.

  5. It’s true that higher education is really worth the time and money. In our country, a bachelor’s degree is highly regarded. I experienced applying for a job when I graduated from college and I noticed that all companies I applied for really look for a bachelor’s degree. Some of them even don’t mind if your course is not related to the job as long as you finish college. But I want to stress out that this is just a stepping stone. Why is that so? The sad reality is that employees are overpaid in the beginning but underpaid for the rest of their lives, just like your story about Jane. It’s as if there is only a small difference between her rate and John’s rate. I’ve seen this happen to people that’s why some of them do job hopping. They keep on transferring from one company to another just to receive high offers since they feel being underpaid after spending a year with their current company. Even I experienced the same. After a year, the difference of my rate with the fresh graduates is very little.

    Finishing college is worth investing on because we get a glimpse of the corporate world from it while we learn basic skills that we can use everyday. It serves as our foundation to everyday life. But it shouldn’t stop there. I suggest that formal education should be followed by self-education. As the saying goes, “Formal education will earn you a living. Self-education will earn you a fortune”. This is where high earnings start to pour, especially for those who build a business on the side while working. They educate themselves by learning new things, especially people skills. They grow their salaries through income generating assets.

  6. I have the option to go into business and that means that going higher than the degree obtained at the university is not the best thing for me. I would prefer to use that period to start my entrepreneur’s goals and aim at building businesses that would make me one of the best business men around my community. However, I won’t degrade anyone choosing to further their education as well.

  7. Yes, I agree with this post that college or higher degree of learning is worth the time and money because it is an advantage of a person to have an opportunity to finish college. Many don’t have the means to pursue college but they want to if they have money. If you have the chance to make it to college, don’t hesitate to make it and finish it. You will gain knowledge and virtues in life.

    1. As an employee, without a bachelor’s degree even if you have spent much of your life in that company, you can’t be hired to a higher position because you don’t have enough credentials for that. It might sound unfair but I have seen many younger employees rise to a higher position despite having the less experience and knowledge to those older in the company, just because they don’t have enough qualifications.

  8. Education is a must in our life. Without education you as person you will face a difficult road than the others. Education is a skill than no one can ever steal it from us. One of the best thing that we can achieve in life is having a good education. Pursue higher education, the more we learn the more chances of being successful person.

  9. Oh yes, the higher education worth the time and money and all the other investment you make in it. Without education you cannot find a job, a higher education can help you find a great and higher paid job. The higher education may boost your career, and you can become someone in your life!

  10. This is an interesting concept. To give another scenario, my husband obtained his master’s degree at RPI, worked for ten years and lived the American Dream. Then, he met me (also college degree, but after four years of teaching, chose an adventurous lifestyle) and, since money and possessions did not make him happy, joined me “on the road” and “on the water” since 2005, living on about $10,000 a year for both of us. I realize we are exceptions, but it touches a different discussion: does money create happiness? 🙂 I do agree with you that higher education opens up an array of possibilities and that “higher studies enlighten a person and bring the best out of him/her.”

    1. That is an awesome comment! This is what I will tell my child — Dear Son, do whatever your heart wants for happiness after you get your education. 🙂 You and your husband are an inspiration. Thank you for visiting and writing a wonderful comment.

    2. I agree that there is an exception. If both of you have already achieved a lot of things and have been successful in life question come to rise and that includes… Can money buy happiness? I believe that once you have achieved success in life then you search for real happiness. Happiness that is genuine and lasting. And shifting to something that makes you happy and fulfilled is one great thing that money can’t buy. But one will never experience the search for happiness if one has an empty pocket at the same time.

  11. It depends on the person, the job, and the degree. I know someone who chose not to go to college. He worked as a construction worker and worked his way up in 10 years to site supervisor (a six figure a year job in NYC). He has no student loans, health insurance, and a car allowance. I also have a friend who went to a college (not a top tier school), got a job as an admin. Twenty years later, she is still an admin, has paid off her student loans, has health insurance, but is not making as much as the construction worker. I should add that I know people who went to certain schools, got hired out of college as an executive and did very well. I should say that I am a big believer in trade schools and value the trades.

    1. Yes, definitely. I am also a believer of in trade schools. I value trades a lot. In fact, I am planning to go to a trade school to learn some trades. I am just not able to manage the time yet. I am also a believer in higher studies. In a few years, there will be so much automation that many of the trades will be gone. For example, after a few years, big trucking companies will not hire drivers anymore. As you know, automatic trucks are coming. I encourage young people to seriously consider going to college, of course if college is where their heart is. As you mentioned, not every trader shines as well as not every college-graduate prospers. If we analyze the US census data, we will see that the per person income is higher in the sates where there are more college graduates (I am working on a topic related to this). I am just talking about average-trends based on some census data. I know there are many exceptional cases, as you and a few other readers have mentioned. I totally agree that we all know some people who are not average at all.

      I appreciate your visit and comment. Have a wonderful weekend.

  12. Higher education helped me financially and to think deeper. It was worth the money for me. I was a single mom with my oldest and getting an education changed my life forever.

    1. I appreciate the comment. Yes, definitely it helps think deeper and outside the box. Thanks a ton, once again, for sharing your story, which will be an encouragement for many people. Have a wonderful day.

  13. My brother-in-law was not the type to do college but he had a talent for computers and electronics. After high school (the late 1990s), he spent a few years working in a dead-end job at a Panasonic electronics repair facility. We convinced him to get trained — 8 weeks, $2000 — with Microsoft Windows Servers and Active Directory. A family friend got him an interview and he had a job with a technology services firm. Fast forward to today and he’s on planes flying to Singapore, Berlin, Hong Kong etc. doing deployments. He never had any education debt. He makes well over $150,000.

    Do you need a college degree to start the next big internet company or are those skills you can learn on your own? Bill Gates, Steve Jobs, Mark Zuckerberg made it without a college degree.

    My feeling is that a person with a Masters degree has more job security.

    As long as your income is dependent on a single source — e.g. a corporation — with has “at will” contract clauses, job-security does not exists. I am 50 years old. I have two bachelors degrees and masters degree all from top 20 schools. I have worked for wall street financial firms, technology firms (in New Jersey) and pharmaceuticals. When I was young I could easily work a 70-80 hour week. I no longer with to eat breakfast, lunch, and dinner at my desk. I have had my work terminated a few times and never because of low performance. When a company takes a downturn there will be involuntary collateral attrition. Customers create jobs, not corporations. And why do you want a job anyway?

    Regardless of the economy, everyone — the customers — needs a plumber, carpenter, mechanic, or electrician. Old homes need repair. New homes need new plumbing, carpenter and electrical. Old cars need repair. New cars need servicing. If you are busy working 70+ hours a week for your $150,000 you don’t have time to learn and do your own repair work.

    If everyone is off getting a college degree to get an office job, they’ll need to hire someone to do those other tasks.

    I think your stated cost of college does not reflect the reality of what it cost to attend a four-year college. In-state tuition at Rutgers University in New Jersey is $30,000/year. That’s a STATE university. Private universities in the state cost over $60,000/year. I know this for a fact since my son is a freshman in the fall.

    I am not suggesting that college degrees are a waste of resources. I am suggesting that a college degree is not a guarantee of anything.

    1. Sure. Sure. I am not debating that college degree is an absolute necessity. As I mentioned in my post and you also pointed out in your comment, there are millionaires (and billionaires) who do not have any college degree. These are exceptional cases. The question for average people like me is, do all college-drop-outs become millionaires?

      About the in-state tuition fee, I was not talking about top 20 or even top 50 schools nor I was referring to a specific field like IT. I was referring to the schools that are affordable by many students who do not receive support from parents. This is why I provided my example using UTEP, where many students are first-generation college-going students. Many of their parents have income less than 30k per year. I completely agree that a college degree is not a guarantee of anything. At the same time, not having a college degree does not make it any easier.

      The college tuition fee I used in my post is based on UTEP tuitions (generally less than $9,000 per year). Even the out-of-state tuition is much low here. With $30,000/year in top 50 schools, one can pay the loan back afterwards with a $150k job. Most of the times, the first generation college-going kids coming from low-income families do not find the idea of college-education compelling because of large figures.

      I agree with everything you are saying but the purpose of the post is different than what we are discussing now. You might have noticed that I did not even mention that brilliant students could get scholarships that they do not have to pay back when they graduate. I did not mention that senior undergraduate, Masters, and PhD students may get Teaching Assistantships and Research Assistantships based on merit, which will cover their tuition plus they will get a monthly salary. When I was writing this post, the audience in my mind was different than exceptional and gifted people.

      Thank you very much, once again, for visiting and providing detailed comments.

  14. For my field (engineering and information technology) a Masters degree is the norm if you want to get the job that pays $150,000 per year (about $75/hour) and only after you pay off the $80,000 student load. Then you need electrical or plumbing work done in your home and the average cost works out to $100/hour for a person with trade school training.

    1. Haha. I thought in Information technology, people earn $150k right after bachelors (in some big companies like Amazon or Microsoft or Google). I agree that the hourly payments of many trade jobs are great, which is awesome. My feeling is that a person with a Masters degree has more job-security. Her/his payments are generally not hourly. In contrast, in trade jobs there might not be enough trades everyday to earn $150k per year. I definitely agree with you that there are many jobs where one can earn well with trade school training. Electrical, plumbing, and automobile are very good examples, as you mentioned. It is awesome that our economy supports great earnings with trade school training. Thank you very much for visiting and writing a thought provoking comment. Have a wonderful day.

  15. An eyeopener and a thought provoking post. In India, there is only one mantra for survival – studies and more studies. There is no way the two could be compared in terms of what they earn. Unless they are movie stars or into business.

    1. Glad to know that you liked the post. Things are changing in USA too. With automation in industries and everywhere, may be it will become harder to get a good job with a high school diploma in a few years. Definitely, movie stars and business magnets are exceptions. Have a wonderful evening.

  16. Well done! There is nothing more important than education. I have stressed this to my children and grandchildren. I my self returned to college more than once to continue my nursing degrees.

    1. That is so awesome that you continued your nursing degree. I totally agree, this is what is important — coming back to get the education. Thank you so much for the inspirational comment. I am sure you are an inspiration to your children and grandchildren. Best regards and have a wonderful week.

  17. Good post and we’ll written. Both my kids went to uni after high school. My son went on to a Masters. Both have good jobs and both work hard. Neither of them would have the jobs they do without the higher education. They would not even have been able to get an interview for the jobs they now hold. As a Gradnparent the best gift I can give is a Registered Education Saving Plan so my grandkids have a bit of a leg up and not so much debt.
    Anne Leueen recently posted…Monday Minstrel: A PrayerMy Profile

    1. I am so happy to know that you liked the post. Thank you for sharing the stories of your kids. It sounds they were raised by someone with a great vision. No doubt that Education Saving Plan is the best gift for grandkids. It seems the kids and grandkids of your family are blessed by visionaries. Have a wonderful week.

  18. Higher education is absolutely worth the money & effort, no matter what age you are. I dropped out of high school and dropped out of college twice before I was finally able to finish a certificate program & an associate degree at the same time. I was in my 30’s. education not only taught me my trade, it gave me confidence in myself to go after my dreams.

    1. I highly appreciate that you have shared your experience. This is exactly what I am talking about. There can be many reasons to drop out; coming back at any age is the important part. My grandfather decided to pursue a Master’s degree in his fifties (and he obtained it). Right before he retired, he decided to earn a law degree. He became a lawyer in his sixties. He rarely practiced but he became an inspiration for his future generation. As you said, education gives the confidence to go after dreams. Have a great day. Thanks once again, for visiting and commenting.

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