Becoming a teacher vs. skipping college: A financial wash?

There’s been much talk lately about whether college is for everyone. And there’s always much talk about teacher preparation and pay. Let’s combine these issues and look at them through a specific lens: money.

Consider Bob, who just graduated high school and is torn between two career paths. His father is a proud mechanic who wants Bob to learn the skill and join him on the job. His mother is a schoolteacher, and part of him has always wanted to go to college and follow in her footsteps. What should Bob do?

Ignoring all other considerations, let’s see how the financials shake out.

First, let’s clarify our assumptions.[1About half of the country’s 3.8 million teachers hold only a bachelor’s degree, and the policy of providing automatic pay raises for obtaining master’s degrees may be on the way out. Let’s look at the lifetime earnings of public-school teachers with bachelor’s degrees, and let’s compare this figure with that of high school graduates who have never stepped foot inside a college classroom, whom I’ll call “non-college-goers.”

Measures usually define “lifetime earnings” as one’s aggregate earnings between the ages of twenty-five and sixty-four, including pensions. So step one is determining how much people in either situation earn between the start of their working careers and the age of twenty-five. Estimating a median annual salary of $25,000[2for non-college-goers, these individuals, who start work at age eighteen, can expect to earn about $175,000 ($25,000 x 7 years) by the time they turn twenty-five. And using the $36,000 average starting salary of a U.S. teacher, our K–12 educators, who start work at the age of twenty-two, should expect to earn about $111,000 ($37,000 x 3 years) by the same age, factoring in small raises in years two and three. Our mechanic is ahead by $64,000 at this point.

Step two is determining how much each group earns from age twenty-five onward. According to this Georgetown University study, the median “lifetime” earnings (i.e., earnings between the ages of twenty-five and sixty-four) for non-college-goers is $1.3 million. For an educator with a bachelor’s degree, that amount is $1.76 million. Now the teacher has an advantage of about $400,000.

The final step is factoring in the cost of obtaining a bachelor’s degree. According to the U.S. Department of Education, the average cost of a four-year degree—tuition, fees, and room and board—is about $92,000. Non-college-goers, of course, have a net cost of $0.

So, factoring in the cost of education, here are the lifetime adult-earnings estimates for teachers with bachelor’s degree and non-college-goers, with all of the above steps included:

From the time a future teacher graduates from high school until she retires, she can expect to net about $300,000 more than someone who never attended college, which is about $6,400 per year over that forty-seven-year span or about $123 per week.[3That’s no windfall, but it’s something.

Still, that’s not the whole story. Another interesting question is how long it takes a teacher to overtake a non-college-goer in net lifetime earnings after paying for college and starting work later. In other words, at what age does a teacher start to see the financial benefit of her bachelor’s degree and career choice?

Recall from above that a teacher starts teaching at twenty-two, after she’s taken on loads of college debt. College costs $92,000, and by twenty-two, a non-college-goer has amassed roughly $100,000 in lifetime earnings.[4So at that point, a new teacher is nearly $200,000 behind.

From the age of twenty-two on, a teacher earns roughly $43,500 annually ($1.87 million / 43 years), which is lifetime earnings without considering the cost of college. During that same timespan, a non-college-goer earns about $32,000 annually ($1.3 million + $75,000),[5an annual difference of $10,000.[6]

So a teacher will have to work nineteen years to break even with someone who never went to college. And that teacher will be forty-one years old. Here’s a graphical representation:


To put this relatively small advantage in perspective, here’s the same chart with the lifetime earnings of someone with a bachelor’s degree who makes his/her career in a STEM field:[7]

One could draw a number of conclusions from this. And how one feels about these data likely says a lot about that person’s values and opinions.

Someone who really values money might say that pay for both non-college-goers and teachers is too low to really consider those as smart career choices. Another person who thinks $30,000–$45,000 is an adequate annual salary may look at this and question the value of going to college at all. A third might call this whole analysis irrelevant because teaching is a calling and people don’t do it for the money. All of these views are reasonable.

But if we’re trying to be as objective as possible, we can reach at least a couple of additional conclusions. First, if teaching is a financially viable career choice, then so is doing something that doesn’t require college. Ergo, we shouldn’t push college for everyone. Being a mechanic is a solid, respectable career choice, and certain people might enjoy it far more than many white-collar jobs. (Office Space, anyone?)

On the other hand, if teaching isn’t a financially viable career choice, then something is very wrong with the system. Teachers are hugely important. They educate the future American workforce. And not paying them an attractive wage is, at best, economically irresponsible. Moreover, the country needs people who do jobs that don’t (or shouldn’t) require a college degree. And paying these people such an unattractive wage is also problematic.

Third, it’s clear people should strongly consider heading into STEM fields. Computer-science majors, for example, are really cleaning up.

The big question, then, is this: why? Why is teacher pay so low? Or, if you don’t think the pay is so bad, why do we push college for everyone? My colleague, Chester Finn, tried his hand at answering the former about a decade ago—and not much has changed since (as it were, stagnation in American education is an all-too-common theme these days). And Mike Petrilli—another colleague—recently had some interesting things to say about the latter question. There’s no sense in taking up space reinventing the wheel, so I’m going to let their ideas speak for themselves.

Whatever you think about teacher pay, the data demonstrate that a change is in order. Whether the solution is better pay for better teachers, less traditional college for every single high school graduate, or some middle ground, the lesson is clear: as a wise fly once said, “The status quo has got to go.”


[1Let me clarify the approach of this post, in general. I have intentionally simplified a rather big, complicated topic for the sake of clarity, brevity, and accessibility. Readers who want to know more should follow the links to my sources and do further research. This should mainly serve to jumpstart conversation. Moreover, throughout the analysis, I use historical data and assume that these patterns will hold. If they do not, the change could favor either side.
[2The linked NCES data show that non-college-goers earn a median annual income of $29,950 between the ages of twenty-five and thirty-four. Therefore, for the sake of this analysis (and because we’re only looking at seven years), an annual salary of $25,000 between the ages of eighteen and twenty-four seems reasonable. Any error of a couple thousand dollars on either side of that figure isn’t going to change much.
[3Some readers will likely point out that few teachers will teach for forty-plus years. I agree. But the same can almost certainly be said for mechanics, autoworkers, teamsters, carpenters, and so on. Others may point to things like health benefits (remember, though, that pensions are included in the calculation) as a significant advantage for teachers. But while it may be the case that teachers’ benefits have historically been more valuable than those of non-college-goers, things like the Affordable Care Act and more miserly employers have made benefits less valuable than they once were. And this trend toward less or more equal benefits doesn’t seem to be reversing. Therefore, I’ve excluded this consideration.
[4$25,000 annual income times four years for ages eighteen through twenty-one.
[5The $1.3 million figure comes from the Georgetown University study. The $75,000 figure comes from the $25,000 estimated annual income for three years, from the ages of twenty-two to twenty-four.
[6This, as the reader can see on the line graphs, ignores changes in slope due to pay increases tied to salary schedules, experience, and the like. But again, this can cut both ways. It could be that non-college-goers’ wages spike early and even out over time. It could also be the case that those wages spike late and teachers make more, comparatively, earlier on than they do later in their careers. And frankly, it doesn’t change the final figure. Therefore, I’ve used a constant slope.
[7This figure comes from this Georgetown report, which lists the lifetime earnings (i.e., earnings from the ages of twenty-five through sixty-four) of someone with a bachelor’s degree working in a STEM field as a little over $3 million. I then added three years (i.e., from the ages of twenty-two through twenty-four) of the average starting salary for a college graduate, $44,500, and subtracted the average cost of a four-year college degree, $92,000.

More By Author

Related Articles