Salient to Investors:

Jaison R Abel and Richard Deitz at FRB of New York said:

  • The value of an average US university degree has been near all-time high for more than a decade but may be only because wages of high school graduates have been falling.
  • It takes the average student at least half of the time to pay off school debt as it did in the 1970s.
  • The value of a college degree plummets if the student takes more than 4 years to graduate because of the “opportunity cost”, or money lost by not entering the job market, and because they never really catch up to those who graduated earlier, though the value of a bachelor’s degree remains substantial even for those taking 5 or 6 years to graduate.

The National Center for Education Studies said more than 40% of full-time students seeking bachelor’s degrees at 4-yr institutions fail to graduate from that school within 6 years.

Devin Fergus at Ohio State University said students are drowning in debt because of Reagan’s effectively reducing spending on higher education by 25% over 5 years, effectively shifting grants to loans.

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