College tuition high, but cost of not going is higher

College tuition is high. Student loans can be crushing. Is higher education really worth all that money?

Yes, especially in a recession, says a new report from the College Board, a Princeton, N.J., not-for-profit group that administers the SAT and other college-readiness programs. College graduates not only make more money than a high school graduate who hasn’t attended college, they're more likely to be employed.

Between 2008 and 2009, unemployment for college graduates rose from 2.6 percent to 4.6 percent, the report found. But in that same year, high school graduates saw their unemployment rates rise from 5.7 percent to 9.7 percent.

Over the past 20 years, that pattern has held steady: Regardless of the state of the economy, high school graduates are roughly twice as likely to be unemployed as college graduates.

In terms of pay, the gap has grown. In 1982, college graduates earned 50 percent more than high school graduates. By 2008, their wages were almost 100 percent higher.

There are non-income benefits, too.

College grads are more likely to say that they find their jobs satisfying. They are more likely to get health insurance, a pension, and other benefits, according to the report.

With increasing education comes more interest in community service, more responsible health choices, better parenting, and other invaluable benefits, says Sandy Baum, an independent policy analyst for the College Board and lead author of the report. “The skills and values and attitudes are part of the [college] package, and not only for the individual. We have a much richer society if we have people with those skills and attitudes.”

Still, attending college usually means losing four years of earnings at a full-time job, and there are all those student loans to pay off.

“There are so many terrible stories of young people who graduate with six-figure debt, with a degree, in, say, social services, and their jobs will never be able to pay off that debt in any reasonable time period,” says Robert Martin, economics professor at Centre College in Danville, Ky. "It’s an important question to ask, if everyone should go to college."

“There are certainly people like that," Dr. Baum concedes, "but they are not representative."

On average, college grads can pay off their loans and make up the four years of “lost” wages (assuming they didn’t work their way through school) within 11 years of graduation, the report found. Interestingly, those who earn an associates’ degree will be about the same age – 33, on average – when they pay off their loans, because it takes them the two extra years to make up for the lower incomes they earn, compared with college graduates.

After that, the income advantage of the college-educated vs. the non-college-educated begins to grow.

Attending one year of college gives students an 11 percent higher salary than just graduating high school, the report found. A second year offers another 13 percent. A third year is another 14 percent, and so on.

“More education pays off at every step,” Baum says.

A recession makes the difference more acute.

“Whenever you have a recession, it takes hardship and multiplies it by five," says David Card, an economics professor at the University of California at Berkeley. "Groups that have traditionally had it easy will experience a little discomfort, and groups that have always struggled will really suffer.”