You can use this calculator to determine the value of a college degree. By entering the cost of a college education, along with your expected salary after college or high school, the calculator will tell you how much a college degree is worth.
Inputs
College Information
Salary Information
Result
| Total Cost of College | $40,000 |
|---|---|
| Earnings at Retirement (Without College) | $980,000 |
| Earnings at Retirement (With College) | $2,250,000 |
| Net Benefit of Attending College | $1,270,000 |
Calculator Definitions
The variables used in our online calculator are defined in detail below, including how to interpret the results.
Current Age (Years)
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This is your current age, which will be used along with your anticipated retirement age to compute the number of years that you will be employed.
Retirement Age (Years)
This is your anticipated retirement age, which will be used along with your current age to compute the number of years that you will be employed.
Current Cost of College ($ / Year)
This is the current cost to attend college for one year. The default value is the average cost to attend a private school (2008 / 2009), while the cost to attend a public school is $6,585 for that same timeframe.
College Attendance (Years)
This is the number of years spent attending college. This value will be used to compute the total cost of a college education. This calculator will assume that college costs increase at a rate of 3% each year.
Salary After College ($ / Year)
This is the anticipated salary after attending college. The default value for this calculator is the average salary for an adult 18 years and older with a Bachelor's degree. Individuals with a Master's degree averaged $61,287, while individuals with some college, or an Associate degree, averaged $32,894 according to information published by the U.S. Census Bureau in January 2009.
Salary After High School ($ / Year)
This is the anticipated salary for individuals with a High School diploma. The default value for this calculator is the average salary for an adult 18 years and older according to information published by the U.S. Census Bureau in January 2009.
Total Cost of College ($)
This is the total cost of a college education, which was found by multiplying the current cost of college by the college attendance value. The cost of college was increased at a rate of 3% each year.
Final Pay - College / High School ($ / Year)
These two values demonstrate the difference in the final pay for individuals with a college degree versus a high school diploma.
Total Earnings - College / High School ($)
This series of numbers is the calculated earnings for individuals with a college education versus a high school diploma. The total earnings values are found by multiplying the salary after college (or high school), by the number of years spent working until retirement. This calculator increases the starting salary by 3% each year, and assumes a college student does not work while in school.
Present Value of Earnings ($)
This series of numbers converts all future earning dollars into today's dollars. This step takes the nominal dollars calculated in the previous step and converts them to real dollars.
Present Value of College Costs ($)
Once again, the nominal cost of college is converted back to real dollars. These last two steps allow for a direct comparison of the financial costs and benefits of a college education, because all future dollars have been converted into today's value.
Value of College Education ($)
This is the calculated value of a college education. In this last step, the present value of college costs is subtracted from the present value of all earnings. The value of a college degree as calculated here is once again stated in terms of real dollars.
Disclaimer: These online calculators are made available and meant to be used as a screening tool for the investor. The accuracy of these calculations is not guaranteed nor is its applicability to your individual circumstances. You should always obtain personal advice from qualified professionals.
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