Is a university degree still worth the cost?
By Lexus Rae, October 24 2024—
University graduates typically earn some of the highest incomes after completing their studies, but the financial return on a post-secondary education has declined in recent years. A recent analysis by The Royal Bank of Canada shows how graduate earnings have not kept up with the increasing cost of tuition.
The analysis done by RBC compared the earned income of 2017 graduates five years after graduation with the tuition in the last year of study. With inflation, tuition rose 12 per cent between 2012 and 2017, and the median income for graduates rose 4 per cent from 2017 to 2022.
Engineering and architecture undergraduates have seen the most increase of tuition out of any other degree. The median incomes for architecture five years after graduation in 2022 were 8.6 times more than tuition costs in the final year of study, while five years earlier it was 10.6. The median income 5 years after graduation for engineering was 10.2 compared to 12.3 five years earlier.
The analysis noted that engineering still provides a higher return to tuition investment than most programs.
Income after graduation also contributes to the state of the labour market, broad macroeconomic policy, the quality of education and specific job experiences. The analysis says that it is difficult to predict if the recent trend on financial return of investing in higher education will carry in the future.
In an interview with the Gauntlet, Joseph Marchand — Economics professor at UofA — talked about how your earnings with a University degree will still rise, but not as much as it would have in previous years.
Marchand shared that the basic measure of earnings by educational attainment would say that no matter what, it is higher. Receiving a University degree will only increase your job prospects or earning.
“It looks like it is worth it in that University graduates still get more in earnings than all of the other educational attainment categories,” said Marchand. “Your earning will depend on what you do when you get out [of University] and what you pay during your time to finish your degree.”
Marchand shared that the Alberta Centre for Labour Market Research has officially launched. It was established based on a 1.2 million dollar grant from the government of Alberta.
“We do a ton of research in this area of labour economics, on labour markets, and we want to aggregate it for people,” said Marchand.
Alberta’s 2024 budget for spending on post-secondary funding has been cut by 7.3 per cent. If this budget continues to decrease, universities have no choice but to increase tuition each year. For now a university degree still seems to be worth the cost, but it may not be the case in the near future.
This article is a part of our Opinions section and does not necessarily reflect the views of the Gauntlet editorial board.