You won’t believe how much the average college graduate is worth

Many of us probably grew up hearing that a college degree is key to securing a lucrative job. However, the high cost of a college education discourages many people.

Still, for those who can change it, a college degree can have a huge impact on their net worth. Here’s some recent data on the link between education and net worth to help you decide if this is the right path for you.

What is the average net worth of a college graduate?

Net worth is an important measure of wealth. To calculate this, add up the value of your assets, including savings account funds, your home, your car, and your investments. Then subtract the value of your debt, including mortgage balances, credit card balances, and unpaid medical bills. Net worth can be positive or negative, with a higher net worth indicating more wealth.

The average adult with only a high school diploma had an average net worth of $413,300 in 2022, according to data from the Federal Reserve. The average net worth of people with a college degree was just over $2 million. This figure is almost five times higher. However, there are some caveats here.

What averages don’t tell you

First, when evaluating data related to wealth, the average is not always the best number. That’s because a small number of people making millions of dollars a year can significantly skew the average. Many sources use the middle figure because it better represents the situation of middle-income earners.

Looking at the median data, the difference in net worth between college graduates and high school graduates is slightly smaller. The median net worth of high school graduates in 2022 was $106,800, while the median net worth of college graduates was $464,600. However, this figure is more than four times higher for college graduates.

But even this doesn’t tell the whole story. People from wealthier families are more likely to go to college in the first place. They are also more likely to attend more selective schools, pursue four-year degrees instead of two-year degrees, and complete those degrees.

People from low-income families typically face increased barriers to higher education. Many may choose a less expensive school and attend only part time. If you cannot afford to continue, you may have to drop out. Therefore, differences in net worth are not purely due to level of education. Coming from a family with a higher socioeconomic status influences the likelihood that a child will obtain a college degree and have a higher net worth.

What does this mean to you?

The decision about whether to attend college or not is always a personal one, and future earning potential is not the only factor to consider. You should also evaluate the cost and time investment required, as well as the availability of alternative routes to the career you are interested in.

If you decide not to go to college, you can save money upfront. However, in the long run, you may be able to earn a college degree. It’s okay if you can’t go to college right now. You can return to school later if you feel it is the best move for your career and net worth.

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