This Is the City Where a College Education Pays Off the Most

The return on investment for a college education has been muddied by the cost of student loans. Some of these are large enough that they can take over a decade to pay off. This means many graduates cannot buy a home or have a standard of living close to that of their parents.

On the other hand, college graduates make more money than people who have only a high school degree or those who went to college but did not graduate.

The value of a college education varies from place to place, in part because in some areas a degree means higher wages. To determine the city where a college education pays off the most, 24/7 Tempo reviewed five-year data on earnings by educational attainment from the U.S. Census Bureau’s 2020 American Community Survey (ACS). Metropolitan statistical areas were ranked based on the raw difference in median earnings for workers 25 years and older with a bachelor’s degree and the median earnings for workers 25 years and older with only a high school diploma.

Many of the places we considered also rank among the metro areas with the highest incomes overall. These areas tend to have a relatively high concentration of tech workers, one of the highest-paying job markets in the country. College-educated IT specialists, software and hardware engineers, and other high-tech workers can often earn well over $100,000 per year.

The metro area where a college degree pays off the most is San Jose-Sunnyvale-Santa Clara, California. Here are the details:

  • Earnings premium for bachelor’s degree holders: +$38,439
  • Median earnings for bachelor’s degree holders: $86,665
  • Median earnings for high school graduates: $36,566
  • Adults with at least a bachelor’s degree: 52.5%
  • Most concentrated job requiring a bachelor’s degree: Computer hardware engineers (13.5 times the national employment share)

Data on the percentage of adults 25 and over with at least a bachelor’s degree came from the 2020 ACS and were five-year estimates. Data on the most concentrated job requiring a bachelor’s degree came from the Bureau of Labor Statistics May 2021 Occupational Employment and Wage Statistics program and was calculated using the location quotient, a ratio comparing the share of workers in a specific occupation as a share of all workers in a metro area relative to the share of workers nationwide in the same occupation. Only detailed occupations in which the typical educational entry requirement is a bachelor’s degree or higher were considered. Data on typical educational entry requirements came from the BLS Employment Projections program and are for 2020.

Click here to see all the cities where a college education pays off the most.

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.