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Attending College, Even Without Finishing, Yields Economic Benefits

Research has clearly established the economic advantage of having a college degree over completing just a high school education. But a new study shows that attending college—even without completing—can pay off in higher earnings.

On average, students who enroll in a two- or four-year program but do not get a degree make about $8,000 per year more than those with just a high school diploma, according to a report by The Hamilton Project, an an economic policy initiative of the Brookings Institution. Over a lifetime, this can translate into more than $100,000 in income.

"Of course, the high rate of return associated with attending a few years of college does not imply that dropping out of college is a better option compared to completing a bachelor's or associate's degree," the report says. "Instead, what this analysis suggests is that the downside risk of trying for a college degree but not making it all the way to a degree is not that bad, and could still be worth the investment of time and tuition."

As with a degree, attending some college but not receiving a degree also has a higher return than all other conventional investments, write authors Michael Greenstone and Adam Looney. The annual rate of return of an investment in some college was 9.1 percent. This rate of return is more than 3 percentage points higher than the average stock market returns and 7 percentage points higher than the returns from investing in Treasury bonds.

In a 2011 Hamilton Project study, the benefits of a four-year college degree were found to be equivalent to an investment that returns 15.2 percent per year. They estimated the various costs of college total $102,000 for four-year college degree and $28,00 for an associate's degree. Over a lifetime, the average college graduate earns roughly $570,000 more than the average person with a high school diploma only and an associate's degree can improve earnings by $170,000 over a high school diploma.

Last December, the State Higher Education Executive Officers released a study that showed students who earn an associate degree have a median income of $38,607, which is about $9,000 higher than someone who only finished high school (about $29,500). Median income for a bachelor's degree holder was $50,360, and those who complete graduate school(which include master's, professional, and doctoral degrees) earn on average $68,064.

The Georgetown University Center for Education and the Workforce has consistently found that college graduates outpace those with less education in employment and earnings.

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