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Should I get a degree?

Compare lifetime earnings on two paths — uni vs straight to work — using your own salary assumptions.

Calculator education

Logic updated April 2026

This calculator compares two career paths side by side: one where you study full-time for a few years before earning a higher salary, and one where you start work immediately at a lower salary. It shows the cumulative earnings advantage year by year and surfaces a third scenario — what would have happened if you'd invested the education cost instead. It's a modelling tool, not a forecast.

How this is calculated

Formula 

Path A (degree): years 1..studyDuration → −cost/duration ; year n > studyDuration → salaryWithDegree × (1+g)^(n − studyDuration − 1) ; Path B (no degree): year 1 → −vocationalCost (if any) ; salary × (1+g)^(year − 1) ; Investment scenario: educationCost × (1 + r)^year

Step-by-step

  1. During the study years, the with-degree path subtracts education cost evenly (negative cashflow)
  2. After graduation, the with-degree path starts earning at the user-supplied starting salary, growing each year
  3. The no-degree path starts earning in year 1, optionally minus a one-time vocational course cost
  4. Each year, calculate the cumulative gap (with-degree minus no-degree)
  5. Build the investment scenario: education cost compounding at the chosen investment return rate, year by year
  6. Identify break-even (year cumulative degree advantage flips positive) and milestones at 10/20/30 years
Rounding mode
ROUND_HALF_UP
Precision
20-digit internal precision (Decimal.js), rounded to 2 decimal places for display
Logic last reviewed

Assumptions & limitations

What this calculator assumes

  • Modelling tool — projections reflect the user's own salary assumptions, not labour-market forecasts
  • Each path grows at its own user-supplied annual growth rate
  • Education cost is spread evenly across the study period
  • Vocational course cost is applied at year 1 of the no-degree path
  • The 'invest the fees instead' scenario is one possibility — not a recommendation
  • No taxation, no jurisdictional repayment thresholds

What this calculator doesn’t account for

  • Salary inputs are assumptions — the calculator can't validate them against labour-market data
  • Doesn't model career-progression dependencies (some roles structurally require degrees)
  • Doesn't include non-financial benefits of either path
  • Doesn't account for unemployment risk during the study years on the no-degree path
  • Doesn't model lifelong learning costs that may apply to either path

Worked example

A school leaver compares a 4-year degree at $20,000/year total cost leading to a $65,000 starting salary, vs starting work immediately at $40,000, both growing 3%/year, with a 6% investment return on the alternative scenario, projected 30 years.

Input Value
Education cost $80,000
Study duration 4 years
Salary with degree / growth $65,000 / 3%
Salary without degree / growth $40,000 / 3%
Investment return 6%
Projection horizon 30 years

Break-even year: ~9 — Year 30 cumulative gap: ~$830,000 in favour of degree — Year 30 invested $80k: ~$459,000

Years 1–4: degree path has -$20k/year cost; no-degree earns $40k → no-degree leads by ~$240k. Year 5: degree starts at $65k vs no-degree at ~$45k — gap closes about $20k/year. Break-even around year 9. By year 30, the degree path is ahead by ~$830k cumulatively. The 'invest the $80k instead' scenario shows that money would grow to ~$459k at 6% over 30 years — a real alternative use of the funds, but lower than the cumulative income advantage in this scenario.

Frequently asked questions

Is a degree worth it financially?

It depends on the cost, the salary premium, and the time horizon. A degree with a $30k/year salary premium that costs $80k typically pays back within 5–8 years of graduation. A degree with a $10k/year premium that costs the same takes 15+ years. Use the calculator with your own numbers — the answer is rarely 'yes' or 'no' universally; it's specific to the degree, the cost, and the alternative.

What is the earnings premium?

The dollar difference between with-degree and without-degree starting salaries — and how that gap grows over a career. Average earnings premiums vary by field: STEM and professional degrees often have premiums of $20k+ per year that widen over time; some humanities degrees have small premiums that stay flat. The calculator works with whatever premium you input; check actual salary surveys for your field to set a realistic figure.

How do I factor in opportunity cost?

Two ways. (1) The negative cashflow during study years already captures forgone earnings if you treat the education cost as 'cost + missed wages'. (2) The investment scenario shows what the education cost alone would become if invested. Both views matter — a complete picture asks 'what if I'd worked AND invested those years?' The calculator covers the second; the no-degree path covers the first.

What about non-financial benefits?

The calculator only models money. Real reasons people pursue degrees include intellectual development, professional licensing, network effects, and personal fulfilment — none of which fit on a spreadsheet. If the financial picture is close (within 10–15% either way) at your projection horizon, the non-financial factors should probably decide. If the financial gap is huge in either direction, the math is doing the heavy lifting.

What if the no-degree path includes vocational training?

Use the vocational course cost input — it's a one-time deduction from the no-degree path in year 1. Vocational pathways (apprenticeships, certifications, trade schools) typically cost much less than degrees and lead to immediate earnings. They're often financially competitive with degrees, especially in skilled trades. The calculator handles either; the right comparison depends on the actual paths you're considering.

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