What is the largest cost of college? Is it the $10,000 to $40,000 per year in tuition and fees? Or, is it the cost of housing, meal plans and food, books, and other college-related expenses? While all of those direct costs of college add up, there is a hidden cost that most people fail to account for: Opportunity Cost.
Opportunity Cost is an economic term that refers to what is given up when choosing between alternatives. For graduating high school students, the opportunity cost of going to college can often be measured by the salary of the job they forego when they instead go to college.
The minimum wage varies greatly by state. However, for purposes of illustration, let’s assume that a graduating high school senior could get a job that pays $10 per hour. Assuming a 40-hour work week, that works out to $20,000 per year. Over the course of the four years it will (likely) take that same person to graduate from college, this person will have forgone $80,000 in lost wages! When added to the $100,000+ that the average student will spend on college, we see that the real average cost of college is closer to $200,000 or more!
It is true that college degree holders earn, on average, $22,000 per year more than those with only a high school diploma. So, using all of these average numbers, we see that it’s not until more than ten years after high school graduation that a college graduate's lifetime earnings start to produce a return on their college investment.
However, that’s true only if the student doesn’t go into debt to go to college. With current average student loan interest rates running about 6%, and the average person taking 20 years to pay off their student loans, tack on another three and a half years of the college graduate’s salary going toward interest. All of these numbers mean that it’s likely not until a person is about 33 years old that they realize a return on their college investment if they take out student loans.
How Scholarships Change The Picture
A student who earns enough in scholarships to pay for their college degree realizes a significantly faster return on their college investment. Remember, even without student loans, our hypothetical average college graduate starts about $200,000 behind in lifetime earnings compared to their friend who started working right out of high school. Since the only cost of college, when scholarships cover tuition and other expenses, is the opportunity cost, it takes our hypothetical college student less than four years after college to achieve lifetime earnings higher than their friend who started working after high school.
Suppose a student works on scholarships for three hours per week starting in their junior year of high school and continues until they graduate college. By the time they graduate, they will have worked on scholarships for 900 hours, which is the equivalent of 37.5 days of the student’s life.
37.5 days working on scholarships vs. 13.5 years working to pay off student loans. That’s the opportunity cost of failing to apply for scholarships. The choice is yours.
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Back by popular demand for Summer 2025!
Start your scholarship journey this summer with the Scholarship Summer Camp.
Your student will learn the skills needed for scholarship success by applying for real scholarships, including a $35,000 scholarship capstone project!
Every Monday through Thursday, a new, pre-recorded lesson will be released. On Thursday evenings, we will be live (but recorded for future viewing), discussing the week's lessons and taking Q&A.
This online program provides both on-demand and live learning opportunities. Best of all your student will apply for real scholarships during the course of the camp! In fact, your student will apply for scholarships offering more than $40,000 in potential winnings!
The Scholarship Summer Camp starts June 2, 2025, and runs for 6 weeks. Here’s an overview of what will be covered each week:
Week 1: The Basics: The tools, documents, and resources you need for scholarship success.
Week 2: Your Personal Narrative: Learn how to build your Personal Narrative, a key component for scholarship success.
Week 3: Finding The Right Scholarships For You: Learn where to look and how to determine which scholarships are the best ones to apply for.
Week 4: Why Do You Deserve To Win This Scholarship? (Apply for a Real Scholarship This Week!)
Week 5: Topical Scholarships (Apply for Another Real Scholarship This Week!)
Week 6: $35,000 Capstone Scholarship Project!
The Scholarship Summer Camp is for high school students in the Classes of 2026, 2027, 2028, and 2029.
Click here to register today.
