Have you ever thought about why saving for their children's college education is such an important part of every parent's financial plans? Why do so many of them take heavy loans just to put their kids through college?
It's understandable that parents do it because they have the best interests of their children at heart. They want to see their children succeed in life, and consider a college education fundamental to that success.
But why does our government give out so much money every year in financial aid for college students? How do they possibly benefit from spending billions of dollars in grants, scholarships, and loans, for something that seems to contribute just to an individual's personal development?
It's because the value of higher education goes far beyond personal benefits. In addition to contributing to a person's individual development, higher education also helps in nation building.
According to a study conducted by College Board in 2004 on trends in higher education, college has both individual and societal benefits. Unfortunately, not enough effort has been made to spread awareness about the value of higher education to the society at large.
Benefits of Higher Education: Individual and Societal
The debate about the value of higher education is probably as old as college itself. We have all had animated living-room and classroom discussions about the benefits of higher education to us as individuals. So, in addition to the personal benefits that college has for individuals, it's important to also focus on the societal benefits of higher education.
For an individual, college education has the potential to impact her personal, professional, financial, and social well-being. Study after study has been conducted to demonstrate that higher education can lead to higher earnings.
The U.S. Department of Labor (DOL), in its 2010 survey, established that professionals with some sort of college education have higher weekly earnings as compared to those who have no post-secondary education. In fact, the higher an individuals level of education, the higher his income. Naturally,
professional or graduate degree programs have higher earning potential as compared to bachelor's or associate's programs.
In terms of employment opportunities, college graduates also generally fare much better than their high school counterparts. The DOL survey showed an inverse relationship between higher education and unemployment rates. The rate of unemployment among high school graduates was 10.3 percent in 2010, as compared to just 5.4 percent among those who held a bachelor's degree, and 4 percent among those who had completed graduate degree programs. (1)
Not just the
number of employment opportunities, but even the nature of jobs available to individuals improves with college education. A number of white-collar jobs, even entry-level ones, are available to college graduates only. Those with no post-secondary education, on the other hand, may get stuck in an endless cycle of minimum wage and low-skill jobs.
On a personal level, college education can build self-confidence and enhance an individual's position in her community. Plus, some of the bonds formed in college can last a lifetime and can contribute to a person's overall happiness quotient.
As for the societal benefits of higher education, some of the facts revealed by the College Board study may actually come as a surprise.
- Because college education can lead to lower levels of unemployment and poverty, it can result in higher tax revenues and lower dependence on social benefits.
- Those who go to college are believed to be better members of society, which is demonstrated by their contributions to their community through volunteer work, blood donation, voting in elections, etc.
- College graduates are also less likely to be perpetrators of crime and have lower incarceration rates as compared to those who have never been to college.
- And finally, believe it or not, college education leads to lower smoking rates. That may be because college grads have a higher sense of personal health and well-being.