- The main piece of evidence cited by policymakers is the “graduate premium”—the difference between the average earnings of someone with a degree and someone with no more than a secondary-school education, after accounting for fees and the income forgone while studying.
- This gap is often expressed as the “return on investment” in higher education, or the annualized boost to lifetime earnings from gaining a degree. Research by the New York Federal Reserve shows that the return on investment in higher education soared between 1980 and 2000 in America, before levelling off at around 15% a year.
- In other words, an investment equal to the cost of tuition and earnings forgone while studying would have to earn 15% annual interest before it matched the average value over a working life of gaining a degree.
Source link : https://www.economist.com/news/international/21736151-financial-returns-are-falling-going-university-more-important-ever