The mainstream idea that a college degree is a great investment and more necessary than ever, due to the rapidly changing economy, will be challenged in the near future. A cost of college report by Washington, D.C.-based policy and public affairs consulting firm Hamilton Place Strategies finds that an undergraduate college degree will no longer be worth the cost by 2086.
If tuition rates continue to rise at their current astronomical trajectories, college will cost $181,000 a year — a cool $724,000 in total.
How did HPL calculate these estimates? HPL researchers wanted to find whether the cost of tuition would ultimately outweigh the higher earnings benefit of a degree in the long run.
They took the current economic benefits of a college degree, looked at average tuition growth rates and found the intersection of marginal cost and benefit to see if the degree as an investment no longer made sense. According to the report, the current economic benefit of a bachelor’s degree over an associate’s degree is about $340,000 in lifetime earnings, but will no longer be profitable in 72 years.
With student loan debt swiftly rising, alongside tuition prices, the worth of a college degree has been questioned in recent years.
Another interesting point the report makes is that alternatives to traditional modes of higher education may have the potential to drive down costs. Since economic returns of the traditional four-year degree are a major factor driving tuition costs higher, perhaps innovations in education, such as the proliferation of online learning, could affect the sticker price on a college education.
Looking at the numbers, online higher education has the potential to be big in challenging the future of the traditional classroom experience. Millions of people of all ages are now learning online (often for free), regardless of their socioeconomic backgrounds. Some reports say half of all college classes will be conducted online by 2019.
Platforms like edX and MIT OpenCourseWare offer courses from world-renowned institutions such as Harvard and MIT to anyone in the world with an Internet connection. Colleges will need to start paying more careful attention, unless they want to be irrelevant by 2086.
Image via Hamilton Place Strategies
