The $140 Billion Public-College Myth

The public's confidence in higher education is falling rapidly. The share of the public that has confidence in higher education declined from 57% in 2015 to 38% in 2026. As colleges and their advocates try to win back the public's confidence, one of their strongest arguments is that college is worth it for both students and for the country broadly.

While it is true that a college education generally pays off for the typical student, there are a few problems with this view. The biggest, and most obvious, problem to note is that there are many predictable cases in which college is not worth it from a financial perspective. A famous example is Harvard's certificate program in theater, which failed an Obama-era debt-to-earnings measure because it left graduates with excessive debt ($78,000) relative to earnings ($36,000).

Perhaps more important, however, is that the value of a college education is often overstated. A recent analysis from the Institute for Higher Education Policy (IHEP), which sought to determine the economic contribution of four-year public colleges, provides a representative example of this mistake.

The IHEP formula estimates the net benefit of a college education as the higher wages of college graduates after accounting for the net cost of college paid by students. The headline value is determined by the annual earnings of college graduates ($62,300) minus the earnings of high school graduates ($35,700) and the net cost of college ($13,000). It then multiplies the resulting figure by 10.3 million college graduates.

The resulting figure is $140 billion. Therefore, the analysis concludes, the implication is that public four-year colleges provide a net benefit of $140 billion to the economy.