Report: Even a Partial College Education Pays Off

A new study finds that investing in a partial college education may be worth the price, and those who only complete part of their college education can potentially earn $100,000 more in their lifetime then people who just receive a high school diploma, reports Justin Pope of the Associated Press. People who complete their degree get a better return on their college investment, but a partial college education has a better return on average than stocks and bonds.

‘‘It is vastly better to get a college degree,'' said Adam Looney, policy director at The Hamilton Project, the Washington, D.C.-based think tank that authored the report. ‘‘But I think the evidence says that fears of dropping out, that there are big downside risks to trying it and not finishing it, I think those are overblown. For people who are interested in college, who have ambitions of going and have the ability and qualifications to succeed, I think the evidence suggests it's an extremely good deal right now.''

This is particularly relevant since approximately half of college students borrow money to pay for their education. Two-thirds of 2011 college graduates had an average debt of $26,600, according to the Project on Student Debt.

According to a report by Education Sector, as of 2009 the proportion of borrowers who did not complete their degree has grown 29%. Those borrowers had a much higher default rate on their student loans, with 17% defaulting versus 4% of borrowers who completed their degree — a statistic influenced by borrowers who completed their bachelor's degree making an average of $32,000 more than those who did not.

But benefits, albeit lesser, still accrue for those who do not finish. A recent report shows that those who partially completed a degree earn $8,000 more than those who only receive a high school diploma.

The report also points out that the national unemployment rate for those with some college or an associate's degree was 6.5%, which is below the national average of 7.6% of people over 25.

Looney said the report reflects a well-established literature that even small increments of additional education pay off. The Hamilton Project report calculated the average annual investment return on a partial college education at 9.1 percent annually. That's well below the return of more than 15 percent annually on a bachelor's degree, but better than the historical average of conventional investments including stocks, gold and housing.

‘‘From a broad perspective it's never been a better time to invest in education because the labor market is just screaming out for those skills and credentials,'' Looney said.

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