Perspective | Is college still worth it? Read this study.

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<pre><pre>Perspective | Is college still worth it? Read this study.

Without sufficient savings or scholarships and grants, students and their parents feel they have no choice but to take student loans.

But this punishment has rightly sparked a debate: is college still worth it?

Economists and researchers have long pointed out that a university degree – even with debts – is worthwhile.

According to a report published by the College Board in 2016, a nonprofit organization that holds the SAT entrance exam, the median graduate of a four-year university can expect to earn median high school graduate age 34 as soon as they leave campus.

According to a 2014 Federal Reserve report, employees with a bachelor's degree earn an average of well over $ 1 million more than high school graduates earn over the course of their working lives.

"Yields have remained high despite rising tuition fees and falling earnings as wages for those without college degrees have also decreased, keeping college wage premiums almost at an all-time high while lowering opportunity costs for schooling," the Fed report said.

But high college borrowing can mean decades of debt payments. In my experience, many students and families struggle to face this fact.

Before you borrow or allow your child to go into debt to attend dream school, you must read: “Is college still worth it? The New Calculus of Falling Returns, ”an article recently published in the Federal Reserve Bank of St. Louis Review. This is the selection of the Color of Money book club this month.

You can find the paper at Research.StLouisFed.org. It was written by William Emmons, deputy vice president and economist at the Federal Reserve Bank in St. Louis, and the senior economist at the Center for Household Financial Stability. Ana Kent, a political analyst for the center; and Lowell Ricketts, the center's leading analyst.

It is important to put the college income bonus in the right light to get people to question blanket statements that education bonds are a "good investment". This article is not only about income, but also about a better measure of economic success: wealth.

I'm always looking for dates to keep families from borrowing too much for college – or at all. I discovered this paper after reading a recent Atlantic article by Annie Lowrey that reports on the magazine's economic policy.

This study "is an exercise in pulling averages apart," writes Lowrey. "A closer look reveals terrible generation-related and demographic trends."

The researchers used the Federal Reserve Board's consumer finance survey to determine whether the economic and financial benefits of post-secondary education have changed over time. Your results are daunting.

"Our results suggest that college and postgraduate courses fail for financial reasons for some graduates," the authors write.

The paper is extremely technical, but browse the data to get to this important point: “The prosperity advantage of higher education has recently declined among graduates of all population groups. Among all racial and ethnic groups born in the 1980s, only the wealth premium for white four-year university graduates is statistically significant. "

Even for the latter group, the wealth premium is significantly lower than for previous generations of graduates and for colored people “not statistically indistinguishable from zero,” according to the study.

Why are younger graduates not doing so well financially?

For one thing, older generations benefited from rising house prices, which increased their wealth. They also didn't overburden the debt. "The explosion in consumer debt that began in the early 1980s was remarkable," the authors write.

And of course, the youngest college graduates have to deal with an astonishing rise in college costs. Many find it difficult to save or build assets because they are unable to service their debts.

If you are able to advise a student on his or her college choice, read this document. Unless otherwise, these results should make families pause and consider how student credit burdens can affect their present and future wealth.

On February 6, at 12:00 noon Eastern Time, I'll be hosting an online discussion about "Is college still worth it?" At washingtonpost.com/discussions. Talk to me about whether a degree is worth its ever higher price.

Do you have a question about retirement or personal funding? Have an online question and answer session with Michelle every Thursday at 12 noon. Easter. Readers can contact Michelle Singletary of the Washington Post, 1301 K St. NW, Washington, D.C. 20071 or michelle.singletary@washpost.com. To read the previous Color of Money columns, go to http://wapo.st/michelle-singletary.