New Report Emphasizes Economic Importance of Higher Education

By Catherine Groux
Posted June 22, 2012 09:14 AM

A new report outlines the economic significance of earning a college degree.
A new report outlines the economic significance of earning a college degree.
In recent years, the troubled economy has put both state and federal budgets under extreme pressure, often forcing them to make cuts in financial aid and public university budgets. This, in turn, has put higher education out of reach for many individuals. However, as President Barack Obama stated in February, access to a college degree is crucial for all Americans.

"We can't allow higher education to be a luxury in this country," Obama said. "It's an economic imperative that every family in America has to be able to afford."

To highlight the importance of higher education to the nation's economy, the U.S. Departments of Treasury and Education recently released a new report.

With More Education Comes Higher Earnings

One of the most significant findings of the departments' research was how drastically higher education can affect individuals' salary. According to the report, the median weekly salary for a full-time, full-year bachelor's degree holder is $1,053, while high school graduates typically earn $638 weekly. In other words, Americans with a four-year degree can expect to see weekly earnings that are 64% higher than their peers who did not attend college.

Additionally, the report suggests that this drastic income gap will only continue to grow. The difference in salary between degree holders and high school graduates has been expanding through the 1980s and '90s, and today, the income gap is the highest it has been since 1915.

Making the Case for Increased Access to Federal Financial Aid

As a college degree can have a significant financial impact on individuals, the report states that it is becoming more important than ever for all Americans to have access to college. An important part of this is ensuring students can receive federal financial aid, as this form of funding represents 55% of all the financial aid given to undergraduates at two- and four-year schools.

Despite a struggling economy, the departments suggest preserving access to federal financial aid, especially Pell Grants and Stafford loans, as they are the biggest components of federal aid.

"Pell Grants help to make college more affordable for students who come from middle-class and working families, while the Stafford program provides loans to enrolled students and their families to ensure that access to higher education is within reach," the report states.

While much work must be done to improve student access to financial aid, the report states that the Obama Administration has made strides by increasing the maximum Pell Grant by over $900.

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