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HPS Cost Of College Report

February 11, 2014

Just how high can the cost of college go? Recently, there has been a lot of discussion on college affordability and multiple new policy proposals. With college tuition on the rise, HPS wanted to investigate the actual value driving these increases and determine just how sustainable tuition increases are.

The results in this study evaluate the real economic benefits of higher education in terms of higher lifetime earnings. Our goal was to determine how long higher education would remain a compelling investment should tuition continue to increase at the current rate.

According to our analysis, a college degree is and will remain one of the best available investments. Based on our findings:

  • A four-year degree would no longer be worth its cost in the year 2086 at the price of $181,000 per year, assuming tuition costs continue to increase at present rates;
  • The present benefit of a college degree over a high school diploma is equal to approximately $725,000 in lifetime earnings; and
  • The present benefit of a bachelor’s degree over an associate’s degree is equal to approximately $340,000 in lifetime earnings.

Matt McDonald, Partner, Hamilton Place Strategies
Pat Brady, Analyst, Hamilton Place Strategies
Alex Dilley, Associate, Hamilton Place Strategies