Benefits and Costs
of Education
Getting the idea
Different occupations require different levels
of schooling. The table shows some
occupations, their average education costs,
and their average yearly salaries.
Occupation
Average Education
Costs
Years of College
Average Yearly
Salary
Waiter
$0
0
$18,000
Hairdresser
$15,000
0
$22,000
Teacher
$115,000
4
$55,000
Software Developer
$200,000
7
$115,000
Surgeon
$300,000
12
$190,000
College
Some of these occupations require more posthigh school education than others. Paying for
a college education can be a challenge.
Fortunately, there are ways to make it a bit
easier.
College Costs
Students who qualify for financial aid get
reduced tuition costs. For example:
• Grants and scholarships award money for
college that does not have to be paid back.
• Federal loans are available at very low interest
rates.
• Work-study programs allow students to work
while they are at college to earn money to
help pay for education expenses
Example 1
Use the table on average yearly salaries.
Suppose Joanne graduated high school at the
age of 18. She plans to be a teacher.
– How much would Joanne earn if she plans to work
until she is 60 after paying off her college
expenses? Assume Joanne makes the average
yearly salary, has average educational costs, and
takes no extended absence from her profession.
Strategy: Find the expected earning and
subtract education expenses
• Step 1: find Joanne’s lifetime earnings if she
works until age 60.
– Joanne needs 4 years of college, so she will start
working when she is 22.
• 60-22=38 years as a teacher
• 38 x $55,000 = 2,090,000
• Step 2: subtract the education costs.
$2,090,000-$115,000=$1,975,000
• Solution: Joanne would earn $1,975,000 after
education expenses.
Example 2
Paula graduated high school at age 18. How
much would Paula earn (after education
expenses) if she worked as a surgeon until age
65, but took an extended leave of 8 years to
raise her children?
Strategy: Find the expected earnings and subtract
education expenses
• Step 1: Find Paula’s lifetime earnings if she works
until age 65.
– Paula needs 12 years of post-high school education, so
she will start working when she is 30. She will also
take 8 years off.
• 65-30-8=27 years of working as a surgeon
• 27 x $190,000 = $5,130,000
• Step 2: Subtract the education costs.
– $5,130,000 - $300,000 = $4,830,000
• Solution: Paula would earn $4,830,000 after
expenses
Example 3
Compare the costs of becoming a teacher to
the costs of becoming a lawyer. Also compare
the salaries of the two occupations.
Strategy: Use the table
• Step 1: Compare the average education costs
– Cost for a teacher: $115,000
– Cost for a lawyer: $200,000
– $200,000 ÷ $115,000 = 1.7 (rounded)
• The cost of becoming a lawyer is almost twice the cost of becoming a
teacher.
• Step 2: Compare the salaries.
– Salary for a teacher: $55,000
– Salary for a lawyer: $115,000
– $ 115,000 ÷ $55,000 = 2.1 (rounded)
• The average annual salary of a lawyer is about twice that of a teacher.
• Solution: The cost of schooling and the three-year delay in
beginning work are more than made up for by the salary a
lawyer makes.
Example 4
Compare the costs of becoming a hairdresser
to the costs of becoming a software
developer. Also compare the salaries of the
two occupations.
Strategy: Use reasoning
• Step 1: Compare the average education costs
– Cost for a hairdresser: $15,000
– Cost for a software developer: $115,000
– $115,000 ÷ $15,000 = 7.7 (rounded)
• The cost of becoming a software developer is about 8 times the cost of
becoming a hairdresser.
• Step 2: Compare the salaries.
– Salary for a hairdresser : $22,000
– Salary for a software developer : $93,000
– $ 93,000 ÷ 22,000= 4.2 (rounded)
• The average annual salary of a software developer is about four times
that of a hairdresser.
• Solution: The cost of schooling and the four-year delay in
beginning work are more than made up for by the salary a
software developer makes.