NEW YORK - Some comforting news for recent college graduates facing a tough job market and years of student loan payments: That college degree is still worth it.
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Those with bachelor's or associate degrees earn more money over their lifetime than those who skip college, even after factoring in the cost of higher education, according to a report released Tuesday by The Federal Reserve Bank of New York. The study, by economists Jaison R. Abel and Richard Deitz, also found that a degree is still a good investment for college grads whose jobs don't require college. About a third of all college graduates remain underemployed for most of their careers.
A person with a bachelor's degree can expect to earn about $1.2 million more, from ages 22 to 64, than someone with just a high school diploma, the report says. And someone with an associate degree will bring in $325,000 more than someone with a high school education. The study used data from the U.S. Census Bureau and the Bureau of Labor Statistics.
Rising tuition costs, surging student debt levels and an increase in unemployment rates among new grads since the recession have caused some to question the value of higher education.
The New York Fed study is just the latest to say that a degree is a good investment. A Pew Research Center report from earlier this year said young adults with college degrees make more money, have lower rates of unemployment and are less likely to be living in poverty than those with just a high school education.
During the deep recession, young people holding degrees often couldn't find jobs and people started questioning whether the expense was worth it, said Cathy Almquist, director of institutional research at Trident Technical College in North Charleston.
"It shouldn't be a surprise that the youngest workers get hit the hardest," Almquist said. "Those who had a college education fared the economic downturn better than those who didn't. Even when times are hard, a college degree makes a difference."
The two-year college offers training for workers and associate degrees that can transfer to four-year institutions, but furthering education of any kind beyond high school can change lives, she added.
"The big power of a college education is it has the ability to be an economic life-changer," she said. "When students leave our institution, that would put them in the middle class. For a lot of our students, that's an opportunity they can't get anywhere else."
She added that young people who don't know exactly what they want to do can start with a technical college and learn a trade that doesn't cost as much as a traditional four-year degree.
Local economist Steve Slifer agrees.
"The short answer is ... a college degree is worth it - for many people," he said. "But perhaps some young people should wait a while to figure out exactly what it is that they want to do. Think about the costs involved and the potential to repay that debt once you get the degree. And think about other options. There are many other very respected professions out there that do not require a traditional four-year college degree."
Slifer, who said he went to college before joining the Army and then going back to school, suggested students start with a junior or technical college and then transfer to a four-year institution to avoid piling up debt, get the most education for the money and choose a career that will help pay off any student loans.
The New York Fed report says that between 1970 and 2013, those with a four-year bachelor's degree earned an average of about $64,500 per year, while those with a two-year associate degree earned about $50,000 per year and those with only a high school diploma earned $41,000 per year.
After subtracting tax benefits and average financial aid awards, the researchers said a bachelor's degree cost about $122,000 in 2013, while an associate degree cost $43,700. Those numbers take into account that students held off earning money from a job to go to school.
Even college graduates in jobs that don't typically require higher education, such as coffee shop baristas or clothing store cashiers, have more earning power than those with just a high school diploma, the report concluded. That suggests that even in those jobs, college graduates are paid more than workers with just a high school diploma.
Warren L. Wise of The Post and Courier staff contributed to this story.