Summary
A report from the Brookings Institution shows that people with college degrees usually earn more than those without, even after paying off student loans. Degree holders earn about $8,000 more per year, even after loan payments. The real return on investment varies by the type and level of degree.
Key Facts
- College graduates earn roughly $10,400 more per year than non-graduates, dropping to $8,000 more when considering student loan payments.
- Over 42 million Americans have student loan debt, totaling about $1.7 trillion.
- College graduates spend about 23% of their additional earnings on student loans.
- Associate degree holders spend 9% on loans, bachelor's degree holders 19%, and master's degree holders 57%.
- STEM (Science, Technology, Engineering, and Mathematics) majors generally see a higher return on investment, even with higher upfront debt.
- Trades and two-year programs offer good income-to-debt ratios, sometimes being better financial decisions than master's degrees.
- Evaluating debt-to-earnings ratios over time is crucial, as initial loan burdens may decrease relative to income in the long run.
