What is one's opportunity cost for attending college?

Asked on by yaga49

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rrteacher | College Teacher | (Level 2) Educator Emeritus

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The opportunity cost of attending college would essentially be whatever you would have done, and the money you would have earned and saved had you not attended college. This would go beyond the costs of tuition, which might entail college loan debt, and other costs.

When most people go to college, they decide to put off full-time employment or a career for four years. Depending on one's prospects, the opportunity cost could be higher. If one has a skill, for instance, or a family business that would guarantee them a good wage right out of high school, then the opportunity cost would be all the wages and experience they would have gained had they worked for four years rather than going to school in addition to the costs of actually going to school.

So if a person could have earned $25,000 a year for working straight out of high school, and the costs of college are $15,000 a year, then the opportunity cost of attending college would be $40,000 a year. Whether the opportunity cost is worth it or not is a choice individuals have to make, considering both economic factors (like how much more you can earn by going to college) and less tangible ones (the value of an education and the social experience of attending school.) But for everything one decides to do, they face a trade-off, which economists call an opportunity cost.

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