You Won't Believe How Much the Average College Graduate Is Worth

Many of us probably grew up hearing about how a college degree was key to securing a lucrative career. But the high cost of a university education discourages many people. 

Still, for those who are able to swing it, a college degree could have a huge effect on their net worth. Here's what recent data has to say about the connection between education and net worth, to help you decide if it's the right path for you.

What's the average net worth of a college graduate?

Net worth is an important measure of wealth. To calculate it, you total the value of your assets -- your savings account funds, home, car, investments, etc. Then you subtract the value of your liabilities -- your mortgage balance, balances on credit cards, unpaid medical bills, etc. Net worth can be positive or negative and a higher net worth indicates greater wealth.

The typical adult with only a high school diploma had an average net worth of $413,300 in 2022, according to data from the Federal Reserve. Those with a college degree had an average net worth of just over $2 million. That's nearly five-times higher. But there are a few caveats here.

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What the average doesn't tell you

First, averages aren't always the best figures to look at when evaluating wealth-related data, because a few people earning millions of dollars a year can skew the average up significantly. Many sources use median figures because these better represent a middle-income person's situation. 

If we look at median data, the difference between net worth for college graduates and those with a high school diploma is a little smaller. The median net worth for those with high school diplomas was $106,800 in 2022 compared to $464,600 for college graduates. Still, that's more than four-times higher for college grads.

But even this doesn't tell the full story. People from wealthier families are more likely to attend college in the first place. They're also more likely to attend more selective schools, pursue four-year degrees instead of two-year degrees, and complete those degrees.

Those from lower-income families generally face increased barriers to higher education. Many opt for more affordable schools and may only attend part time. They might also have to drop out if they cannot afford to continue. So the difference in net worth isn't purely due to education level. Coming from a family with a higher socioeconomic standing affects a child's likelihood of obtaining a college degree and going on to have a higher net worth themselves.

What does this mean for you?

The decision of whether to attend college is always a personal one, and future earning potential isn't the only factor to consider. You also have to weigh the costs and time investment required as well as the availability of alternative pathways to the career you're interested in. 

If you decide not to attend college, you'll save money upfront. But over the long term, you might come out ahead with a college degree. If college isn't in the cards for you right now, that's OK. You might be able to go back to school later if you feel it's the best move for your career and net worth.