Every three years, the Federal Reserve conducts an in-depth survey that collects data about family income, net worth, credit use, and a host of other variables that weigh on the health of the American consumer. The most recent survey was released earlier this month and reveals, among other things, that the gap between the richest and poorest Americans is continuing to expand.

While this may not come as a surprise, what you might find noteworthy is how big of a role education plays in this divide. According to the data, a college degree doubles the typical person's annual income.

The common retort is that the cost of going to college is skyrocketing. Between 1992 and 2012, the College Board estimates that the annual cost of attending a private college increased from $17,040 to $29,060.

Not surprisingly, student loans are accumulating, as well. Debt incurred to finance higher education is now the second largest source of personal debt in the United States, recently surpassing both credit card and car loans.

But aside from the fact that grants and scholarships have increased at a faster pace during this same period, thereby offsetting much of the perceived growth in cost, there's clear proof that a college degree is worth the investment of both time and money. A separate study by the New York Fed concluded that "the benefits of both a bachelor's degree and an associate's degree still tend to outweigh the costs, with both degrees earning a return of about 15% over the past decade."

More specifically, the study's authors found that the net present value of a bachelor's degree is at an all-time high of roughly $300,000. And that's after factoring in tuition inflation.

To estimate this, they calculated the costs of going to college -- both in tuition and fees, as well as the opportunity cost associated with not being in the labor force for four years. They then compared that to the present value of the wage premium that college graduates earn in the marketplace.

Based on this analysis, they concluded that it takes about 10 years to recoup the costs of a bachelor's degree. "So despite the challenges facing today's college graduates," the researchers note, "the value of a college degree has remained near its all-time high, while the time required to recoup the costs of the degree has remained near its all-time low."

The point here is obvious. Despite the widely publicized trend of increasing costs to attend college, the actual value of a bachelor's degree more than makes up for the difference.


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