Wondering if a College Degree Pays Off? See How It Affects Lifetime Income

Source:  U.S. Bureau of Labor Statistics

“A college degree operates as a signal to employers about the suitability of a job candidate,” said Dr. Kendrick B. Roberson, an assistant professor of political science at Pepperdine University. “Not only does a degree signal a desired knowledge base in a particular field, but a college degree also signals that a candidate has a proven ability to complete tasks timely, completely, and accurately–all traits an employer wants in a new hire due to the reduced cost of training and reduced risk of error that hurts the employer.”

Here are some statistical examples of how a college education impacts income level:

• The poverty rate for those without a high school diploma was about five-and-a-half times higher than those with at least a bachelor’s degree.
• In 2023, median annual income for recent graduates reached $60,000 for bachelor’s degree holders aged 22–27 compared to $36,000 for high school graduates.
• As of 2025, the unemployment rate for those over the age of 25 with a bachelor’s degree was slightly more than half that of those with only a high school diploma.

Examples of How College Degrees Increase Lifetime Income

Of course, going to college to get a degree does not guarantee you’ll out-earn your non-college-educated counterparts. Many factors come into play for total lifetime earnings, including the type of degree, career choice, geographic location, seasonal versus full-year employment, sex, and many others. 

Here are examples of high-paying occupations. Many require at least a bachelor’s degree:

Computer Software

Graduates in this field are in high demand with job opportunities in areas like software development, cybersecurity, and data analysis. According to the BLS, the median annual wage for this group was $104,420 as of May 2023, which was more than twice the median annual wage for all occupations of $48,060.

Electrical Engineering

A degree in electrical engineering can lead to jobs designing, developing, and testing electrical equipment. This work is needed across various sectors, including manufacturing, telecommunications, and the federal government. According to the BLS, electrical engineers had a median annual wage of $109,010 in 2023.

Business Administration and Financial Management

A degree in business administration or management can prepare you for careers in high-level management and executive positions. The BLS reports that financial managers had a median annual wage of $156,100 in 2023.

Physicians and Surgeons

Because the median annual wage is so high at greater than $239,200 a year, the education requirements to become a medical professional are extensive.

The BLS data also breaks down all of the occupations that come under this type of degree. Here are a few from that list:

• Oral and maxillofacial surgeons
• Radiologists
• Obstetricians and gynecologists
• Dermatologist
• Anesthesiologists
• Neurologists

Petroleum Engineering

Petroleum engineers extract oil and gas from the earth. They create plans and design, install, and maintain equipment in oilfields. They also monitor production and seek ways to extract more gas and oil from existing wells.  

As the demands in the energy sector increase, petroleum engineers will be needed constantly. These professionals had a median annual wage of $135,690 in 2023. 

As you can see from this list, the highest-paying careers tend to have an extremely technical focus and may require some education beyond the bachelor’s level. If you’re willing to get a degree in STEM (science, technology, engineering, or math), the likelihood of earning more income over your lifetime increases.

Other Factors That Influence Lifetime Income

Although getting a college degree can mean good news for your lifetime earnings, other factors play into where you could fall on the income distribution bell curve. 

Your age at graduation can significantly impact lifetime earnings since graduating earlier means a longer working period ahead, potentially increasing your total earnings over time. 

Geographic location also plays a huge role in the amount of money you’ll earn over your lifetime as a college graduate. Salaries and the cost of living can vary dramatically across different regions and countries, affecting the value of your chosen degree and job position.

Your level of education also plays a role in the lifetime earnings equation. For instance, you’ll earn more as an engineer with a Ph.D. than a bachelor’s degree. 

Finally, the job role makes a difference in your income. A degree in business administration will have the most value when used in a supervisory or managerial role. If your business degree is used in a sales position with a compensation structure that includes commission pay, the potential for higher earnings increases substantially.

Long-Term Benefits of Higher Education

The benefits of a college degree go beyond higher earnings. They include lower unemployment rates, career advancement opportunities, and personal fulfillment. 

Additionally, college-educated populations tend to enjoy other benefits, such as increased job security and access to health insurance, retirement, and savings plans. 

Lifelong Benefits

According to survey data from the Social Security Administration, a college education can continue paying dividends even after the active earning years. Higher earnings during your career mean higher Social Security benefits in retirement, as well as the potential for access to employer-sponsored retirement accounts like 401(k)s. 

Also, higher education is linked to better health outcomes. The U.S. Department of Health and Human Services summarizes data on education as a social factor that influences health:  

“Overall, higher education can lead to improved health and well-being, as well as reduced risk for premature death. College graduates have better self-reported health than high school graduates, and individuals with more education are less likely to report conditions such as heart disease, high blood pressure, diabetes, anxiety, and depression.” 

The report adds, “Individuals with more education are more likely to exercise, drink less alcohol, and seek preventive health care when needed.”

Colleges Seek Improved ROI

It’s also important to note that many higher education institutions are revamping their curriculums so that students graduate with concrete skills and connections. This is making the education process more efficient while producing a positive ROI sooner rather than later.

Ryan Lufkin is the global VP of strategy at Instructure, an educational technology company. He said, “In an era where universities like ASU, for example, are working directly with employers to design degree programs to ensure graduates have the skills employers need to be immediately productive, degrees increasingly provide clear pathways to well-paying jobs.”

High-Paying Jobs That Don’t Require College Degrees

Although there’s compelling evidence suggesting that there are better financial outcomes for college-educated people, there are several high-paying careers and jobs that don’t require a college degree. It’s good to know about career options in the case that you don’t want to or can’t go to college.

Here are a few to consider: