Earning

Your bachelor's degree will pay off — it might just take 15 years

Twenty/20

Nearly all, or 9 out of 10, college grads don't regret their decision to go to college, but 42% of them don't think their education was worth the amount of debt they took on, according to a recent GoBankingRates survey.

If you're in that group and wondering when your college education will finally begin to pay off, a recent study from Georgetown University's Center on Education and the Workforce might be able to provide some clarity. That study found that several pharmacy schools and maritime institutes provided excellent long-term value, better even than much of the Ivy League.

After crunching the numbers from the Georgetown study, Grow further determined that if you graduated from a four-year school or a bachelor's degree program, it's quite likely that your decision will pay off — but you may not see real results until about 15 years after graduation. The good news, though, is that those results will last and even increase over the course of your life and career.

How a school's "value" is measured

The Georgetown study analyzes the return on investment of more than 4,500 colleges. It measures and ranks each school by a metric called net present value (NPV), which measures the upfront costs of going to school — including tuition, room, board, and other miscellaneous expenses — against your earnings over a lifetime.

The rankings looked at which schools offer a great return on investment 10, 15, 20, 30, and 40 years after graduation. NPV after 10 years is a good metric to determine short-term value, while the 40 year number is the most holistic measure of value over the course of a life and career.

Why bachelor's degrees pay off more in the long run

Since four-year colleges and bachelor's programs generally cost more upfront, students must often take on more debt than they would for an associate's degree or a certificate. For that reason, a BA can appear to be the less valuable option in the short term, according to Ban Cheah, a research professor and senior economist at CEW who worked on the report.

"At that level, the degree that doesn't take as long, like an associate's degree, might look a lot better than a four-year degree," says Cheah.

However, the bachelor's degree has greater long-term value, says Martin Van Der Werf, CEW's associate director of editorial and postsecondary policy. "At the 10 year level, primarily, associate's degrees and certificate programs, they have pretty high value, but their value tends to fade in the face of the bachelor's degree over longer time spans," he says.

Take Drexel University in Philadelphia. Ten years after graduation, Drexel's NPV is $84,000, which puts it at 2,924th on the list. Five years later, though, Drexel's value more than quadruples, allowing it to climb all the way up to 310th.

Drexel's value grows pretty consistently after that, too, and 40 years after graduation, it's the 85th best value school in America.

Meanwhile, Wayne-Finger Lakes BOCES-Practical Nursing Program, a certificate-granting nursing school in upstate New York, stands out as the 85th best value school after 10 years. With an NPV of $252,000, it's worth exactly three times as much as an education from Drexel at that stage.

After 15 years, the two institutions are roughly on par with each other and, after 40, Wayne-Finger Lakes BOCES drops all the way down to 1,161st on the list.

Overall, if you look at the top-ranked schools after 10 and 15 years, you'll see wildly different lists. After 10 years, only 22% of the schools in the top 10th percentile are four-year colleges, and only 9% of them offer bachelor's degrees.

Once you hit the 15-year mark, bachelor's degrees and four-year schools begin to pay off in much greater numbers. By that point in time, 54% of the top schools are four-year colleges, and 44% of them offer bachelor's degrees. After 40 years, the numbers are even more stark: Eighty-four percent of the top schools are four-year colleges, and 79% of them offer bachelor's degrees.

Figure out what 'value' means to you

Net present value can be a good way to evaluate whether a school is a good deal, but Van Der Werf warns that's not necessarily something that can be measured in dollars and cents.

"A person may look at some of these institutions and really be concerned most about long-term net present value, whereas another consumer might look at it and say, 'It has the degree I want, it's going to allow me to change my career, get a promotion, whatever it might be,' and for whatever reason, that might be worth it to that consumer," Van Der Werf says.

Still, if you have a bachelor's or another four-year degree, and you're wondering when it will start paying off, rest assured that the odds are with you. You may just have to be patient.

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