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In spite of cost, college degrees are worth the money

Student getting diploma and handshake
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It's an age-old problem: Americans were taught practically from birth to go to college—preferably one with a big name—in order to get a good job. Yet college costs are staggering, which begs the question of whether college and graduate school are worth the return on investment.

Having a degree—especially in a tough economic environment—certainly makes a difference to employment and lifetime earnings prospects, experts say. Research from the Bureau of Labor Statistics shows a high correlation between joblessness and earnings, and those with less than an associate's degree fare worse on average than workers with post-graduate credentials.

Conventional wisdom suggests that a name like Harvard, Yale or MIT would beat out either a state school or smaller liberal arts college.

However, Gallup recently partnered with Purdue to survey more than 30,000 college graduates across the country. The 2014 study arrived at a common conclusion: the name of a college or university has little to no influence on a graduate's job prospects.

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Work, internships matter

When we asked an open ended question of employers of what's the number one thing they're looking for in recent college graduates they have a very simple answer," said Brandon Busteed, Gallup's Executive Director of Education.

It's not where you went, but whether you've got the skills, he said. Busteed added that employers are "pretty clear" that work experience and internships are what matter.

According to Gallup's findings, where a student went to school "hardly matters at all to their current well-being, and their work lives in comparison to their experiences in college," the report said. "When it comes to finding the secret to success, it's not 'where you go,' it's 'how you do it' that makes all the difference in higher education."

The survey noted that 71 percent of recent grads that are now working full time accredit their success to internships or job experiences while in college, rather than where they went to school.

Furthermore, Busteed says other elements to success include having an encouraging mentor or working on long-term projects while in school also increase students' employability. "There's no reason why that can't happen at any level anywhere," he says.

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More degrees, more money

It goes without saying that coursework also determines how much a student eventually makes. Georgetown University's Center on Education and the Workforce found wide disparity between earnings, educational levels, gender and ethnicity.

However, one variable remained constant. Scholars stated unequivocally that "more education gets workers more money." An advanced degree could earn a worker as much as $2 million more over their lifetimes than someone with a high school diploma, according to Georgetown. Even having limited post-secondary education without having a formal degree can add as much as $250,000 to lifetime earnings.

The sole distinction between private and public education is student loans, an important one given increasingly unsustainable levels of education borrowing.

Meanwhile, a separate report also undercut the idea that an expensive degree is a golden ticket to success.

In a 2013 study, The Pew Research Center found that graduates for private, and presumably more expensive, colleges took out more loans than those from public schools. However, more selective private school graduates eventually achieved the same economic well-being and life satisfaction after graduation as their public school counter parts with similar work experiences.

The sole difference Pew found among graduates' career satisfaction was their level of education. Statistically, those with higher levels of education felt more confident in their career situations (79 percent) than say for example those with a two-year college degree (only 54 percent).

In short, graduates seem to agree that their degrees were worth the investment and are already paying off, regardless of where they got them from.

Dr. John McCarty, a marketing professor at the College of New Jersey, said that practical work experience can make a lot of difference, especially in certain business related fields.

"Think it through very carefully," McCarty advises from personal experience of when to apply for grad school, "I wouldn't go straight for an MBA, I would definitely work first."