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Job security and stability

Higher income

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The College Board's Education Pays report presents data on variation in earnings by different characteristics such as gender, race/ethnicity, occupation, college major, and institutional sector.
NEW YORK - Individuals with higher education levels earn more, pay more taxes, and are more likely than others to be employed and to have job benefits such as retirement and health insurance. Adults with more education are also more likely to move up the socioeconomic ladder and less likely to rely on public assistance, according to Education Pays 2016, the latest report from the College Board's Trends in Higher Education series.

Updated triennially since 2004, Education Pays: The Benefits of Higher Education for Individuals and Society documents differences in the earnings and employment patterns of U.S. adults with different levels of education. The report also establishes a correlation between education and health outcomes, community involvement, and indicators of the well-being of the next generation. In addition to documenting median earnings by education level, this year's report also includes data on variation in earnings by different characteristics such as gender, race/ethnicity, occupation, college major, and institutional sector.

"Although obtaining a college degree can mean forgone wages during a time when they are also paying tuition, by age 34 the average bachelor's degree recipient will have recouped those costs," explains Jennifer Ma, senior policy research scientist at the College Board and a coauthor of the report. "A college education is an investment that pays dividends over the course of a lifetime - even for students who accumulate some debt to obtain a degree."

Although college enrollment rates continue to rise, the patterns are uneven across demographic groups. Among students with similar high school math test scores, those from wealthier families are much more likely to enroll in college immediately after high school, but the enrollment gaps by socioeconomic background are largest for those who are least academically prepared. Among those who enroll in college, students from disadvantaged backgrounds are less likely to begin at a public or private nonprofit four-year institution than others.

"Given the high payoffs of postsecondary education to both individuals and society as a whole, it is important that we increase college opportunity for all who can benefit and also improve completion rates," notes Jessica Howell, executive director of policy research at the College Board. "We've designed our Access to Opportunity efforts to break down the barriers that prevent students from applying to and enrolling in college. Our goal is to help all students recognize and make the most of the opportunities they've earned."
Key findings from the report: Participation and Success in Higher Education

In 2015, 82% of high school graduates from the highest-income quintile enrolled immediately in college, compared with 62% of those from the middle-income quintile and 58% of those from the lowest-income quintile. (Figure 1.1)

The gaps in college enrollment rates between black and Hispanic recent high school graduates and their white peers were 11 percentage points in 2005. By 2015, these gaps had fallen to 8 percentage points for black high school graduates and 5 percentage points for Hispanic high school graduates. (Figure 1.2A)

In 2015, the percentage of female adults age 25 to 29 who had completed at least a bachelor's degree was 24%, 18%, and 45% for blacks, Hispanics, and whites, respectively. The percentage of male adults age 25 to 29 who had completed at least a bachelor's degree was 19%, 13%, and 38% for blacks, Hispanics, and whites, respectively. (Figure 1.6)

The percentage of the high school class of 2011-12 enrolling in college within a year ranged from 31% in the District of Columbia and 32% in Nevada to 61% in Massachusetts and Connecticut and 62% in Minnesota. (Figure 1.7)

Earnings and Other Economic Benefits

In 2015, median earnings of bachelor's degree recipients age 25 and older with no advanced degree working full time were $24,600 (67%) higher than those of high school graduates. Bachelor's degree recipients paid an estimated $6,900 (91%) more in taxes and took home $17,700 (61%) more in after-tax income than high school graduates. (Figure 2.1)

In 2015, among adults between the ages of 25 and 64, 68% of high school graduates, 72% of those with some college but no degree, 77% of those with an associate degree, and 83% of those with a bachelor's degree or higher were employed. (Figure 2.11)

In 2015, when the unemployment rate for 25- to 34-year-olds with at least a bachelor's degree was 2.6%, 8.1% of high school graduates in this age range were unemployed. (Figure 2.12B)

Among high school sophomores whose parents were in the lowest-income group in 2001, 21% of those who earned at least a bachelor's degree, 17% of those with an associate degree, and 13% of those with only a high school diploma had reached the highest-income quartile themselves 10 years later. (Figure 2.15)

In 2015, 4% of bachelor's degree recipients age 25 and older lived in poverty, compared with 13% of high school graduates. (Figure 2.16A)

Variation in Earnings

In 2015, the percentage of full-time year-round workers age 35 to 44 earning $100,000 or more ranged from 2% of those without a high school diploma and 5% of high school graduates to 25% of those whose highest attainment was a bachelor's degree and 38% of advanced degree holders. (Figure 2.3)

Between 2013 and 2014, median earnings for early career bachelor's degree recipients ranged from $30,000 a year for early childhood education and psychology majors to $54,000 for computer science majors, a $24,000 range. By mid-career, the range in median earnings grew to $46,000 a year. (Figure 2.9)

Institutional median earnings vary by sector. The typical four-year college's median earnings of 2001-02 and 2002-03 federal student aid recipients ranged from $33,600 at for-profit institutions to $39,800 at public institutions and $40,500 at private nonprofit institutions. (Figure 2.10A)

Health, Volunteerism, and Civic Engagement

In 2014, smoking rates were 8% and 26% for four-year college graduates and high school graduates, respectively. Within each education level, males are more likely to smoke than females. (Figures 2.18A and 2.18B)

In 2014, 69% of 25- to 34-year-olds with at least a bachelor's degree and 45% of high school graduates reported exercising vigorously at least once a week. (Figure 2.19A)

In 2015, 39% of adult bachelor's degree recipients and 16% of high school graduates volunteered. (Figure 2.22A)

Across every age group, adults with higher levels of education are more likely to vote than those with lower levels of education. (Figure 2.23A)

In the 2014 midterm election, the voting rate of 25- to 44-year-olds with at least a bachelor's degree (45%) was more than twice as high as the voting rate of high school graduates (20%) in the same age group. (Figure 2.23A)

To view the complete report, visit Education Pays 2016.

The Trends in Higher Education series provides insight into trends in college pricing and financial aid. A college education is critical to one's long-term financial security, yet many students and families face real financial barriers to college enrollment and success. The data on college prices and student aid included in these reports create a context for evaluating public policies designed to increase educational opportunities.

For more information about the College Board's work, please visit collegeboard.org
About the College Board
The College Board is a mission-driven not-for-profit organization that connects students to college success and opportunity. Founded in 1900, the College Board was created to expand access to higher education. Today, the membership association is made up of over 6,000 of the world's leading educational institutions and is dedicated to promoting excellence and equity in education. Each year, the College Board helps more than seven million students prepare for a successful transition to college through programs and services in college readiness and college success-including the SAT ® and the Advanced Placement Program ®. The organization also serves the education community through research and advocacy on behalf of students, educators, and schools. For further information, visit collegeboard.org.
Contact:
College Board Communications Office
communications@collegeboard.org
212-713-8052

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College Education Linked to Higher Pay, Job Security, Healthier Behaviors and More Civic Involvement: New College Board Report

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The College Board's Education Pays report presents data on variation in earnings by different characteristics such as gender, race/ethnicity, occupation, college major, and institutional sector. NEW YORK - Individuals with higher education levels earn more, pay more taxes, and are more likely than others to be employed and to have job benefits such as retirement and health insurance.

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More likely to have health insurance with better health coverage

Live a longer life

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Higher levels of well-being and mental health

Higher levels of life satisfaction and personal happiness

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Higher quality of life for their children

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Higher quality of life for their children

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Have children who are more likely to graduate from college

Have children who more likely to attain a higher status, higher salary careers

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More interest in national issues-both social and political

Higher rates of participation in civic affairs and community service

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Make wiser long term investments

Are more likely to continue learning throughout life

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Early Career
If you've just graduated college-first off, congrats! And as you're creating a massive "next steps" to-do list, that might include landing your first grown-up job, moving to new stomping grounds, or creating a budget, you'll want to add one thing: investing.

We get it. While retirement might seem like aeons away, here's the thing: The sooner you squirreling your beans away for retirement, the better.

In this article, we'll go over a few pointers on how to get started investing if you're a fresh college grad:

Start Small and Start Now

Getting a jump on investing using a return on investment calculator when you're young benefits you in several ways. First, time is on your side. And through compound interest, your money will grow quicker over time, explains Larry Ludwig, founder of Investor Junkie.

Let's say you invest the max you can into a Roth IRA, which is $5,500, each year for 10 years, explains Charlie Horonzy, CFP®, CPA of Focused Up Financial. So, from when you're 21 to 31 years old, you invest $5,500 a year. If you earn an 8% return on your money, by the time you're 65, you'll have earned nearly $1.2 million!

Now let's say you wait five years and then start investing at age 27. And if you invest $5,500 each year for 10 years, and still earn the same rate of return: 8%. You'll only have $800,000 at age 65. "While $800,000 is a lot of money, but it's over $375,000 less than if you started investing when you were 22," points out Horonzy.

Besides the power of compound interest, investing now helps you get into the habit of investing. As it's a key part of wealth-building, you'll want to get comfortable with the idea of saving for the long-term, Plus, you'll earn to deal with the inevitable ups and downs that come with investing in the stock market.

Start Small

You don't even need a lot to get started. Here are a few simple ways:

Micro Investing: These days you can invest via a micro-investing app such as or . All you'll need is $5 to open an account. Note that Stash charges $1 for accounts with balances up to $5,000. If you're opening an IRA, it's $2 for account balances up to $5,000.

Like Stash, Acorns' fee is $1 for accounts with balances up to $5,000. If you have more than $5,000 sitting in your account, you'll be charged a percentage. What's pretty cool is that if you're still a college student, Acorns is free for four years. You'll just need to provide an .edu email address.

ETFs. Another option is to invest in ETFs, or exchange-traded funds. ETFs are a type of security that tracks a basket of assets, index, commodity, or bonds. Because you're investing in a bunch of stocks versus a single one, you'll enjoy the benefits of diversification.

Plus, ETFs tend to have lower expense ratios, which is a definite bonus if you don't have a lot of money to invest with. Some brokerage firms even offer no transaction fees for ETFs.

See Where You Can Cut Back

So you're probably scratching your head, wondering where you'll find that extra dough to invest with. It's actually not as hard as you think. First, track your spending to see where you money is going. Then see where you can cut back so you can afford to invest, say, $50 or $100 a month.

You may be surprised to see just how much you spent going out with your friends, or on coffee or trips to the barcade, explains Horozny. "All those drinks add up," says Horozny. "After you start tracking your expenses, it gets much easier to understand just how you're spending money."

It's only then that you'll get clued in on ways you can cut back so you can invest. Maybe it's brown bagging it to lunch a few days a week. Or curbing the impulse to spend a few buckaroos on a flash online sale of your favorite store. And if you're making the effort to save that bit of money, make sure it goes directly toward your efforts to invest.

Take Advantage of Employer-Sponsored Retirement Plans

Does your current workplace offer an employer-sponsored retirement plan, such as a 401(k) or 403(b)? If so, that's a great way to get your feet wet with investing. All you need to do is enroll and decide the percentage of your salary you want to contribute. And be sure to and take advantage of any matching contributions. Otherwise, that's money you're leaving on the table.

Strike a Balance Between Paying Off Debt and Investing

If you've just graduated college, we feel you. But you don't want to wait 10-plus years to pay off your student loans, or until you've made a major dent in your credit card debt to start investing.

Instead, strike a financial balance. You can pay down your debt and invest, points out Robert Farrington of The College Investor. Come up with a plan to pay off student loans and credit card debt and invest a little each month. Even if it's just a hundred bucks a month, it'll help you get into the habit of growing your money. And as you gradually knock off debt, you can funnel more money into building your investments.

Look Closely at Fees

If you don't examine fees, it could cost you. "With everything else you buy, you shop around for the best possible price," says Ludwig. "Why not do it with the investment services you use?" That's right, even a fraction of a percentage could eat up into your investments. So know the total fees you are paying with any investment service you use, points out Ludwig. This may include expense ratios, annual fees, front- and back-load fees, investment management fees, and transaction fees.

"Look for brokers that charge no monthly or annual fees, and have low expense ratio funds," says Farrington. "Many large brokers have no minimum IRAs and other accounts you can take advantage of." Some of the fees aren't as obvious to the customer, adds Ludwig. So do your homework and ask questions before investing.

By keeping investing top of mind right out of college, you'll be laying the groundwork for financial wellness. After all, drumming up ways to grow your money while you're still young is an essential part of adulting. And no doubt, fast forward 20 years, your future self will be grateful.

Jackie Lam is a personal finance writer. Her work has appeared in Investopedia, Magnify Money and The Bold Italic, and she's been featured in Money, Kiplinger, Forbes and Woman's Day. She runs Cheapsters.org, a blog to help freelancers and artists with their money, and to balance their passion projects and careers.

This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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How College Grads Can Get Started Investing

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If you've just graduated college-first off, congrats! And as you're creating a massive "next steps" to-do list, that might include landing your first grown-up job, moving to new stomping grounds, or creating a budget, you'll want to add one thing:... Full Story

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More social self-confidence

Stronger interpersonal and human relation skills