A study of the direct economic returns to investment in college degrees of working adults in Middle Tennessee

The college graduates who were primarily working adults included 373 white graduates from The University of Tennessee at Nashville (UTN) in the five-year period between 1973 and 1977 in six degree programs. The basic data included the UTN graduates' 1978 salary, employment work history, foregone earnings obtained through the use of a questionnaire and coursework costs obtained through individual student transcripts. The earnings streams were based on the graduates' 1978 salary and 1972 and 1975 Current Population Survey income data with adjustments for middle Tennessee. The basic data for the typical college graduates were based on average costs for degrees at UTN and 1972 and 1975 Current Population Survey income data.

The results of the study indicated that the lifetime earnings and returns to the typical college graduates were consistent with those found in the literature. For the UTN graduates who were working adults, however, higher returns and lifetime earnings depended on the discipline of the degree and the size of the opportunity costs rather than the level of the degree or the sex of the graduates. In addition, the lifetime earnings of the UTN graduates who were working adults were expected to be less than those of the typical college graduates in middle Tennessee.

Individuals should exercise careful judgement in making educational decisions about the value of an education because there are numerous variables and factors that need to be considered. The present value and the internal rate of return, however, are additional useful tools which may be employed in the attempt to assess and evaluate the direct monetary benefits of college degrees of working adults.