What is the opportunity cost of getting your college degree?
The opportunity cost of attending college includes both the explicit and implicit costs of attendance. To put it simply, the opportunity cost is the total of the money and options you give up to attend university.
In economics, opportunity cost can be defined as the total of both explicit and implicit costs. Explicit costs are those that require a money payment. Implicit costs are those that do not require a money payment.
The explicit costs of attending college are your tuition, books, fees, housing, and every other cost associated with choosing to attend college. These are fairly easy to calculate and will vary based on your living situation and where you choose to go to college. You can reduce your explicit costs by doing things like getting scholarships, choosing used books, or sharing an apartment with a friend. Keep in mind that some of these expenses—like living expenses—might be lower or higher if you choose another option, like moving to a larger city for a job.
The implicit costs of attending college are the value of the time and opportunities you give up to go. As Gregory Mankiw explains in The Principles of Economics, "If Kobe Bryant had decided to attend college for four years after high school instead of signing with the Lakers, his implicit cost would have been over $10 million, the salary he earned in his first four years as a Laker."
You can't choose one thing without letting go of another. If you want to take a nap, you miss the things you could have done if you'd stayed awake. If you vacation in Australia, you miss the chance to vacation in other locales. When you choose to go to college, you're missing out on the other things you could have done with that time—job training or a career, for example.
To determine a rough opportunity cost for attending college, determine your implicit costs. If you got a job today making $40,000 per year, that's $160,000 you will not earn over four years. (If you work while in college, you can subtract the salary you earn during college from the salary you would have in a non-collegiate career.)
If you expect to make $60,000 per year after you graduate, how long will it take you to earn back that $160,000? It would take eight years at $60,000 to break even. Add $40,000 in tuition and it becomes ten years for things to even out and for you to start seeing a real profit.
Of course, opportunity cost doesn't tell the entire story. You may enjoy a job you get after a college education more than another. You may get quicker raises or have more opportunities. According to USA Today, "College graduates, on average, earned 56% more than high school grads in 2015, according to data compiled by the Economic Policy Institute. That was up from 51% in 1999 and is the largest such gap in EPI's figures dating to 1973."
Everything that we do has an opportunity cost. That is because every time we choose to do one thing, we are not able to do something else with our time and other resources. The opportunity cost that we incur when we choose Action X is the value of whatever we would have done if we had not taken Action X.
In the example of your college degree, the opportunity cost is the value of whatever you would have done with those four years if you had not gone to college. The opportunity cost will vary between people because different people would have done different things had they not gone to college. So, if you would have worked at a job that paid $30,000 per year your opportunity cost would be $120,000. The opportunity cost would also include anything else (such as travelling, getting married, or what have you) that you would have done if you had not been busy taking classes.
So, to answer this, you have to figure out what you would have done if you had not been going to college. This would be your opportunity cost.