A UI education pays better dividends to its graduates even than the stock market.
For every dollar invested by students and their parents in a UI undergraduate degree, $8.57 comes back in future earnings. That's better than the 10-year return of the Dow Jones Industrial Average.
The typical 1996 graduate of the Chicago and Urbana-Champaign campuses will earn twice the lifetime pay of a high-school graduate and about 25 percent more than the average of all college graduates.
A report released Aug. 12 by the UI measures the long-term financial impact of undergraduate education at the state's largest public university.
"At this time of year, people talk about the high cost of college, especially the 'sticker price' of tuition," said Sylvia Manning, vice president for academic affairs, who released the report. "Granted, tuition and fees have gone up at the UI and other universities, but the payback of superior education in today's very competitive job market is tremendous.
"And when we worry, rightly, about the front-end costs of college, we tend to forget about student financial aid. More than a quarter of our students pay less than $500 a year in tuition and fees."
Called "The Earning Curve," the report is based on surveys of more than 12,000 graduates of the two campuses.
The report found that a UI degree more than doubles the lifetime earnings of the average graduate. For example, a man who graduates from the Urbana-Champaign campus will earn $2,660,013, or $1.5 million more than a man with a high school diploma and $654,083 more than the average male college grad.
A man who graduates from the Chicago campus will earn $2,471,025.
The premium of a UI degree is equally striking for women. The average female graduate from the Urbana-Champaign campus can expect to earn $1,802,762 over her lifetime - fully $ 1.1 million more than her high-school counterpart and $577,923 more than the average female college grad.
Altogether, the 1996 class of 8,806 baccalaureates at the university can expect to earn $10.4 billion during their working years above what they would have earned had they not attended college.
Between 1980 and 1995, the earning gap between high school and college graduates has increased. "As computers and new manufacturing methods continue to churn through the economy, the learning-earning spread is sure to widen," the report said.
Two key trends have emerged since 1980. The direct costs of college have gone up because of increases in tuition, but the indirect costs have gone down because of the eroding earning power of high school education.
"Going to college has become more expensive, but not as expensive as the price of not going to college," the report noted.
Illinois taxpayers get a boost from state support of higher education. Looking at taxes alone, economist W. Randall Kangas found that the state treasury receives an average of $87,872 in added sales and income tax revenues thanks to the increased lifetime earnings of each UI graduate.
The report also summarizes the social benefits of college.
"Although it is very difficult to put the general benefits in dollars and cents, study after study shows that additional schooling has a strong positive impact on tolerance toward others, family health, good citizenship and community participation," Manning said.
"The Earning Curve" is based on the research of Walter McMahon,
professor emeritus of economics, and written by Mark Reutter, business and
law editor, UI News Bureau. Free copies of the 14-page report are available
from the University Office of Public Affairs, 333-6400, or fax, 333-5733.