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Americans know the costs of getting a college degree are spiraling. They've heard horror stories of students stuck with huge debts they can't repay. They know how lousy the job market has been for new graduates.

And so they've leaped to exactly the wrong conclusion.

Nearly six out of 10 Americans told Pew Research Center pollsters recently that a college education isn't a good value for the money. That opinion was held about equally among college graduates and nongraduates, although 86% of the graduates said college was a good investment for them personally.

Those dissing the value of higher education are right in one sense: A college degree isn't worth what it used to be. It's worth more.

In the 1970s, those with four-year degrees earned an average of 25% more than high school graduates. Today, they earn 60% more.

It's not so much that degree holders have made huge economic progress in recent decades; it's the fact that people without degrees have lost so much ground. Men without college degrees earn 31% less, in inflation-adjusted dollars, than their counterparts did 20 years ago.

Image: Liz Weston

Liz Weston

After factoring in the costs of college and earnings forgone during those years, the typical college graduate earns $550,000 more than the typical high school graduate over a lifetime, according to a Pew Research analysis of census data.

Those without college degrees not only make less; they suffer higher rates of unemployment as well. The unemployment rate for those with four-year degrees remains under 5%. It's nearly twice that for those with only a high school education, and almost three times higher for those without a high school diploma.

The economic prospects for those without college degrees certainly aren't going to get better. The manufacturing and union jobs that used to provide decent incomes for less-educated workers will continue to disappear or go to other countries.

Yet only 30% of high school graduates manage to get bachelor's degrees these days. An additional 10% will get a two-year degree. Those percentages haven't budged much, even as the financial stakes have risen -- which has drawn the attention of political leaders and economists, who worry that America's ability to compete in a global economy will suffer.

The college dropout rate is phenomenally high. At four-year schools, only four in 10 students earn their degrees within six years. Only 20 percent of those who start at two-year institutions graduate within three years.

And it's not necessarily that these kids can't hack it -- that school bores them, or they don't like sitting in class or the classes are too difficult. It's money.

First, you need to understand that college for most students doesn't resemble college as depicted in the movies. Only one in four students attends a residential, four-year school, according to the U.S. Department of Education; the rest go to commuter colleges, and most work. In fact, 45% of students attending four-year schools and 60% of those attending two-year colleges work more than 20 hours a week. So perhaps it's not surprising that:

  • The majority of college dropouts (71%) surveyed in a 2009 Public Agenda report for the Bill & Melinda Gates Foundation cited the need to work and make money as the reason they left school. More than half (52%) said they couldn't afford the fees and tuition.
  • The Pew researchers found similar responses from a pool of 18- to 34-year-olds not currently enrolled in a four-year school -- a group that would include dropouts as well as those who never attended. Asked why they weren't in college, 67% cited the need to support their families, 57% said they preferred to work and make money and 48% said they couldn't afford school.
  • The Public Agenda report found seven out of 10 (69%) of those who dropped out were paying for their education with no financial aid or loans, and 58% didn't have help from parents or other relatives. Of those who graduated, only 43% lacked financial aid, 51% had no loans and 37% lacked parental help.
  • Those who dropped out also were less likely to be convinced of the economic value of higher education, according to the Public Agenda report. Fifty-two percent of dropouts agreed with the statement "In the long run, you will make more money if you have a college degree," compared with 66% of graduates; 50% of dropouts say they knew "many people" who earned a good living without a degree, compared with 40% of graduates; and 43% said they went to college because their parents "always instilled in me the importance of higher education," compared with 57% of graduates.

Some who drop out or never start college point to the outliers -- the small but significant group of people who aren't financially better off after getting degrees.