The Cost of My Education Opportunity Cost for obtaining a Bachelor’s degree on a macro level

What is opportunity cost? Opportunity Cost: is the loss of potential gain from other alternatives when one alternative is chosen. In other words, opportunity cost is what you give up because you choose to do something else.

What is my opportunity cost for college? WORK COLLEGE

U.S. Bureau of Labor Statistics According to the U.S. Department of Labor, in 2016 the median weekly earnings for an individual who only holds a High School diploma is $692, which is $35,984 annually. Unemployment rates for those who only achieved a High School diploma is 5.2%, almost double of those who attained a Bachelor’s degree (2.7%)

U.S. Bureau of Labor Statistics

Unemployment Rates and The GDP Unemployment rates are higher among those who do not hold a college education. When the economy is healthy, unemployment rates are lower and wages and salaries increase as businesses require labor to meet the demands of the growing economy. Higher wages equates to more money in the market and an increase in the overall GDP.

The Price of My Education

Salt Lake Community College Cost of Tuition per semester (12-18 credits): $1,890.25 Fall 2016: $1151.25 (7 credits) Spring 2017: $1890.25 (13 credits) Summer 2017: $1473.25 (9 credits) Fall 2017: $1890.25 (13 credits) Spring 2018: $1890.25 (13 credits) Summer 2018: $1473.25 (9 credits) Fall 2018: $1890.25 (13 credits) TOTAL: $11,658.75 + $1300 for Textbooks -$2,200 Scholarships -$3,780.50 Tuition Waiver SLCC TOTAL: $6,978.25

Salt Lake Community College Cost of Housing per Semester: $500 (living at home: $100 per month) $500 x 5 fall/spring semesters $400 x 2 summer semesters TOTAL: $3,300 + $6,978.25 for school SLCC GRAND TOTAL: $10,278.25

Utah State University Cost of Tuition per semester (12-18 credits): $3,587.32 Spring 2019: $3587.32 (12 credits) Summer 2019: $2853.85 (9 credits) Fall 2019: $3587.32 (12 credits) Spring 2020: $3587.32 (13 credits) Summer 2020: $2853.85 (9 credits) Fall 2020: $3587.32 (13 credits) Spring 2021: $3587.32 (13 credits) TOTAL: $23,644.30 + $2600 for Textbooks -$1538.36 AmeriCorps USU TOTAL: $24,705.94

$3,000 x 5 fall/spring semesters Utah State University Cost of Housing per Semester: $3,000 (living on campus) $3,000 x 5 fall/spring semesters $1680 x 2 summer semesters TOTAL: $18,360 + $24,705.94 for school USU GRAND TOTAL: $43,065.94

Total Educational Costs Grand Total upon Completion of a Bachelors Degree: $53,344.19

Career Options Degree: Business Administration with a minor in Human Resource Management Career Path Average Annual Salary Human Resources Generalist $51,368 Business Analyst $58,805 Stock Plan Administrator $76,531 Health Care Administrator $63,414 Labor Relations Manager $89,806

Earning Potential with a Bachelors Degree

Earning Potential with a Masters Degree

Median Earnings by Race/Ethnicity, Gender, & Education Level (2008)

Education Opportunity Cost Graph $0

What is the Reality Principle? The Reality Principle: what matters to people is the real value or purchasing power of money or income, not its face value.

Reality Principle: Education An individual who holds a Bachelor’s degree, or higher, has the ability to increase their value as the economy experiences inflation. Their net worth will grow parallel to the inflation rate because they have an education and skill sets that are marketable. Those who only have a high school diploma do not have the power or ability to raise their net worth at the same rate as inflation. Their value will decrease in time and will continue to decrease as inflation continues. Possessing a formal education provides a certain prestige, the higher the degree, the more value a person holds. This value increases with earnings.

Doing the Math… The opportunity cost of a college degree is the direct costs, including tuition and books, plus the opportunity cost of time (the salary you could have earned). Simple math will help you determine the opportunity cost and which choice you should make. After 6 years: $35,984 (annual income without a college degree) x 6 = $215,904 vs -$53,344.19 (educational debt) + [$89,806 (potential income as a Labor Relations Manager) x 2] = $126,267.81 After 8 years: $35,984 x 8 = $287,872 vs -$53,344.19 + [$89,806 x 4] = $305,879.81

Education & The GDP C + Ig + G + Xn = GDP (Consumer Spending + Investment in Capital (gross) + Government Spending + Exports (net) = Gross Domestic Product) Having a higher education moves forward the inflation of our economy, which helps to promote healthy competition between companies, which in turn stimulates the economy. Those who most directly impact economic growth – investors and entrepreneurs – also tend to be highly educated. These individuals increase our overall GDP.

Education is a Positive Externality When you gain education you benefit from it, but it also benefits the rest of society. Someone who goes to medical school is benefiting themselves, but benefiting the rest of society because they could potentially find a cure for cancer or some other ailment that torments society. Not only would you personally benefit from earning a college degree, but so would your local and national economy. Higher education correlates to increased salary, and the more money you make, the more money you will most likely spend. You could also contribute to your community depending on what career your college education allows you to have. For example, if you became a teacher, you could help further the education of others, which would be extremely beneficial to society and the economy.

Obtaining a higher education will increase the GDP by $2.8 Billion

Conclusion Going to college will make me happy, happy, happy! After just four years in the workforce after graduating college, we see that the income earning potential is greater with a higher education. In the short run, an college degree is far more expensive, but will pay off exponentially in the long run. The monetary element combined with the Reality Principle make going to college an easy choice. My decision to go to college and obtain a Bachelors degree benefits me personally while ultimately benefitting our society by helping to grow our national and global economies. Going to college will make me happy, happy, happy!

References “Current Student.” Tuition and Student Fees | SLCC, www.slcc.edu/student/financial/tuition-fees.aspx. “Tuition and Fee Schedule” Tuition and Payment Overview | www.usu.edu/budget/pdfs/tuition_and_fees/2017-18usutuition-feeschedule.pdf. Unversity, Utah State. Luxury Student Housing at Blue Square Apartments | USU Housing | USU, www.usu.edu/housing/single/bluesquare. Rothwell, Jonathan. “The Economic Value of Education.” Brookings, Brookings, 28 July 2016, www.brookings.edu/blog/the-avenue/2013/11/12/the-economic-value-of- education/. “The Overall Effects of Unemployment.” Chron.com, smallbusiness.chron.com/overall- effects-unemployment-37104.html. “Unemployment rates and earnings by educational attainment.” U.S. Bureau of Labor Statistics, U.S. Bureau of Labor Statistics, www.bls.gov/emp/ep_chart_001.htm.

References “Human Resources (HR) Generalist Salary.” Human Resources (HR) Generalist Salaries | PayScale, www.payscale.com/research/US/Job=Human_Resources_(HR)_Generalist/Salary. “Business Analyst (Unspecified Type) Salary.” Business Analyst (Unspecified Type) Salaries | PayScale, www.payscale.com/research/US/Job=Business_Analyst_(Unspecified_Type)/Salary. Stock Plan Administrator Salary, www.payscale.com/research/US/Job=Stock_Plan_Administrator/Salary. “Healthcare Administrator Salary.” Healthcare Administrator Salaries | PayScale, www.payscale.com/research/US/Job=Healthcare_Administrator/Salary. Labor Relations Manager Salary, www.payscale.com/research/US/Job=Labor_Relations_Manager/Salary. “Median Earnings by Race/Ethnicity, Gender, and Education Level, 2008.” Median Earnings by Race/Ethnicity, Gender, and Education Level, 2008 - Trends in Higher Education - The College Board, trends.collegeboard.org/education-pays/figures-tables/median-earnings-race-ethnicity-gender-and- education-level-2008. “Chapter 2” ECO 284 Chapter 2 Outline, franke.nau.edu/pinto- j/ECO284/ChapterOutlines/ECO284Ch2outline.html.