College As An Investment, And Average Lifetime Earnings

The choice of what to invest in is prudently influenced by the rational choice theory in economic which assists an investor in settling for the best available option with the greatest benefit. College can be perceived in different ways regarding investment aspect when looking at the benefits and satisfaction derived as well as its shortcomings and limitations.

Recently there have been great discussions on the importance of attending college.  However, most reports exhibit that attaining a college degree is still an important investment to make in the present time. With respect to a report on Forbes by Troy Onink, despite the factor that investing in college has a higher marginal cost compared to just acquiring a high school diploma, the marginal benefit of this investment is also high as well (Onink, 2014). The report states that the marginal benefit of investing in college education is about one million dollars annually. In particular, individuals who attended college earn a million dollars higher than individuals who just have a high school diploma. In accordance to the report, it is evident that investing in college education is a good investment since the marginal benefit exceeds the marginal cost and keeps increasing in an individual’s life.

A different perspective however strongly disagrees with this perception, pointing out to the view that having a college degree does not automatically qualify you to get higher wages in return. Colleges are known for accepting academically weak students with little interest for academic pursuits, simply because having a degree boosts earnings. This forces these students to get their degrees in fields with less demand. After graduating, such people can hardly get jobs, and instead end up working in fields outside their qualifications (Capital, 2013). Employers reward graduates not only for their credentials, but most importantly by their capabilities. In this day and age the job market is flooded with jobless college graduates, a clear indication that time and money spent on college is quite often wasted. This therefore dispels the attribute of marginal cost and marginal benefit in college as an investment. It is merely average lifetime earnings.


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