Higher Education Earnings Premium: Value, Variation, and Trends

Overall, people with a college education do better in the labor market than people with no education beyond high school. Higher levels of education correspond, on average, to higher levels of employment and higher wages. Yet, as college prices rise and as examples of graduates struggling to find remunerative employment despite their credentials become more visible, both potential students and the general public are questioning the value of a college education. The data, however, remain clear: even at current prices, postsecondary education pays off for most people. Promising occupational and personal opportunities are disproportionately available to college graduates. It is increasingly difficult to maintain a middle class lifestyle without a postsecondary credential, and the economic, social, and civic benefits of a more educated population are well documented. Outcomes do vary considerably, however, both among people with similar levels of education and across types of credentials. Growing income inequality does not just involve a growing gap between the earnings of the most educated and the least educated people; there is also increasing variation within educational categories. Greater understanding of these patterns and of the changes over time in the earnings premium for different levels of education can add perspective to discussions of the importance of increased educational attainment for both individuals and society as a whole. This brief highlights some of the complexities underlying discussions of the return to the investment in postsecondary education and describes some of the variation in outcomes that leads to the prevalent uncertainty about the value of the investment, clarifying that disappointing outcomes for some are not inconsistent with a high average payoff and significant benefits for most student

College financial aid in troubled times

An economist and member of The College Board calls for streamlining the financial aid system to help lower-income families make an investment that is critical to their children’s future.College costs

Access, Choice and the Middle Class

Making postsecondary education available to all those who aspire to it and have the ability to participate has been a clearly articulated goal of public policy over the last two decades. We have made considerable strides toward reaching this goal, but new problems have emerged in the meantime. One of the issues that has become more pressing in recent years is the question of choice among educational institutions available to students from varying backgrounds. Limited choice is an important issue, not only for low-income students, but also for students from middle-income families, whose access to higher education is generally assured, but whose parents might not be able to finance their educations at high-cost institutions. Part of the goal of equal access to higher education should be to allow students at all income levels to choose the alternatives most suited to their own personal needs. It is certainly reasonable to expect students who choose high-cost schools to make larger long-term financial commitments, but the choice of schools should be available. This essay focuses on the causes of the emerging perception among middle-income students that their educational opportunities are being restricted, and offers some potential solutions

Issues of Equity in College Savings

The author reviews the equity of savings plans from a number of perspectives. This article will be published in Fall 1989 by ACE/MacMillan in a book titled, New Ways of Paying for College, edited by Arthur M. Hauptman and Robert H Koff

The Federal Pell Grant Program and Reauthorization of the Higher Education Act

The Federal Pell Grant program has made education possible for many Americans. It has also helped establish the norm of public responsibility for widespread access to higher education. This essay reviews the growth of the Pell Grant program over time and its current characteristics. It then details some innovations with the potential to increase the program’s effectiveness in increasing student success, in addition to access to postsecondary education. Both the eligibility formula and the application process should be simpler and students should not have to reapply every year. Students should receive timely information and coaching services to help them select institutions and programs of study. Some smaller steps also have the potential to make a significant difference

New Directions in Student Loans: Intergenerational Implications

This article examines the intergenerational implications of recent changes in college loan programs, specifically the PLUS Program and income contingent repayment plans. The author explores the idea of who should pay for college from the vantage point of economic theory and argues that a combination of economic approaches can best explain how college is financed today. Are there strong arguments for publicly enforced transfers from one generation to the next? Would a system of individual responsibility for financing higher education be optimal? Are there convincing economic arguments for significant parental participation in paying for college

A ticket to the middle class: working off college debt

A proposed program—in which each year of paid public service would cancel one year of college expense—could lift the burden of debt from graduates while supplying capable workers to municipalities and nonprofits.Student loans ; College costs

Altruistic Responses of the September 11 Terrorist Attacks: Some Evidence from Dictator Games

This paper uses economic experiments to compare altruistic behavior before and immediately after the terrorist attacks. Before September 11 the authors had conducted dictator games in which students were given the option of donating their earnings from the experiment to the American Red Cross. The authors repeated the experiment in late September after the attacks. This paper compares giving before and after the terrorist attacks and evaluates the extent to which altruistic responses before and after the attack differ by gender, major. religious practice and income level. The authors find significant differences in altruistic behavior of women and men. Women donated more than men both before and after the terrorist attacks. In addition, far more women acted as perfect altruists, giving all the money in the experiment to the Red Cross, while far more men acted perfectly selfishly by keeping all the money. Both genders increased giving significantly after the terrorist attacks.