As summer turns to fall, college campuses are again filled with students. Many universities within the University System of Maryland (USM) are seeing their enrollments rebound after pandemic-era drops, and some, like Towson University, are welcoming their largest-ever incoming classes. This is despite national polls showing that Americans are increasingly skeptical about the value of a college degree.
The value question is twofold: Does a four-year degree swell a graduate’s paycheck? And if so, is it enough to justify the money spent on college?
To the first question, the answer is “yes.” The “college wage premium” is 75%, meaning a person with a bachelor’s degree earns, on average, three-quarters (or 1.75 times) more than someone with only a high school diploma — nearly double the salary. Over a career, the difference is typically more than $1 million. This premium fluctuates every year and varies by several factors, most significantly, a graduate’s major and race. But virtually all college graduates consistently benefit from a strong salary return on a four-year degree.
Given that Maryland is routinely ranked among the top states for residents with a bachelor’s degree and with a graduate or professional degree, it’s unsurprising that Maryland is also at the top for household income. This is important because the personal wealth a degree confers, multiplied across individual earners, translates into shared wealth, with higher salaries feeding a larger tax base that supports public programs and services.
Of course, the state as a whole benefits from a college-educated workforce. The 40,000 students the USM graduated last year are driving Maryland’s fastest growing industries (7,450 computer science degrees) and running our companies (8,100 business degrees). They’re filling acute shortages in the state’s classrooms (2,750 teaching degrees) and hospitals (1,600 nursing degrees), so that Maryland can continue to educate and care for its citizens.
Education attainment isn’t all about employment and earnings. It influences how long you’ll live, how healthy and happy you’ll be, how many dollars you give to charity and how many hours to community service. College builds soft skills that are as essential to success as any disciplinary knowledge: critical and creative thinking, communication, collaboration. College is where learners get comfortable working across their differences to solve the most intractable problems of our age — the problems that higher education has always been called upon to solve.
These metrics may speak to the value of college — the benefit — but we still have to look at the cost.
In Maryland, the average in-state price for tuition and fees at a public university is about $10,500, in the very middle of all 50 states in terms of cost. Few students, however, actually pay the full sticker price. On average, college costs less than it did five years ago, even though prices are rising, because financial aid is rising in kind.
Seven in 10 USM undergraduates get some sort of financial aid, averaging $7,100 a year. A portion of this aid comes from USM universities themselves: Together, they awarded $180 million last year to 45,000 students with financial need. In less than a decade, the amount of university money distributed annually in aid has grown by 50%, as has the number of students receiving it.
This aid is the primary reason why half of the USM’s undergraduates complete their degree without accruing any student loan debt. However, that means that the other half of our undergraduates — 50,000 in-state students — are burdened by debt.
Last legislative session, the General Assembly passed Senate Bill 426, authorizing the system to establish a $150 million financial aid fund. As our universities contribute money to the fund and it grows in value, the income generated will be used to shrink the number of students in financial need. For every $1 million, we can eliminate debt for 112 students. That’s thousands fewer students who will have to make one of two difficult decisions: Forego a USM education altogether or take on debt to afford it.
There is a caveat worth nothing in the college-value debate. College is worth it — but only if you graduate. The earnings statistics proving the value of college deflate without the degree. At the University System of Maryland, we’re pairing our efforts in college affordability with our work in college completion, innovating how we develop personalized academic, advising, and financial services for students that keep them in school, that help them graduate on time, and that position them to invest their college-earned wealth in the communities they call home.
In Maryland, that’s how you make college valuable to all.
Dr. Jay A. Perman (email@example.com) is chancellor of the University System of Maryland.