Most college graduates do see a return on investment and report higher earnings than peers with only a high school diploma. But demographic, economic, and geographic factors shape how these benefits show up and ultimately, the value of a college degree, a Strada Education Foundation report finds.
Location matters. Graduates in metropolitan areas are more likely to see a positive ROI than those in rural communities, thanks to greater job availability. Having more job options allows graduates to find a better fit, which in turn maximizes productivity.
States with more of their population living in metropolitan areas—such as New York and California—see stronger degree payoff. In Washington D.C., which is an almost entirely metropolitan area, 90% of college graduates out-earn high school graduates.
Degree density matters too. States with more college-educated residents tend to produce better ROI. The concentration of talent and education can attract other educated people, which creates a cycle that reinforces the value of education and innovation.
The earnings gap is narrowing. In 37 states, the percentage of bachelor’s degree holders out-earning non-graduates was lower in 2023 than in 2013. Black and Hispanic graduates are less likely than White and Asian peers to out-earn the typical high school graduate, and this gap is widening fastest for Black graduates.
Women are also less likely than men across every racial group to out-earn the median high school graduate. But when compared against same-sex, same-race peers instead, women actually benefit more from a degree than men do.
The takeaway for institutions. The report calls for greater data transparency, particularly on where graduates are located, to help prospective students and universities determine realistic earning potential and pathways for economic mobility.
A degree alone no longer guarantees higher earnings for graduates, so it is important for institutions to work towards ensuring a college degree is valuable to everyone, regardless of location.
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