What studying really costs
The hidden cost of choosing to study — wages you don't earn AND the compound growth those wages could have generated.
Calculator educationLogic updated April 2026
This calculator quantifies the hidden cost of studying — the wages forgone during the study period, and what those wages could have grown to if invested at a market return. It surfaces the dollar amount you're not earning while at university, year by year, and projects what that lump sum would have become at the end of a long horizon.
How this is calculated
Formula
Each study year: salaryMissed = currentSalary × (1+g)^(year-1) ; netForgone = salaryMissed − partTimeEarnings ; cumulativeNetForgone = sum across study years ; investedValue(year y) = cumulativeNetForgone × (1 + r)^yStep-by-step
- For each study year, calculate the salary you would have earned: current salary × (1 + growth rate)^(year − 1)
- Subtract any part-time earnings during study to get the net foregone wages for that year
- Sum across all study years to get the cumulative net foregone wages — your opportunity cost of study
- After the study period ends, treat the cumulative foregone wages as a lump sum that compounds at the chosen investment return rate
- Project the investment scenario year by year for the projection horizon
- The final value is what those wages could have grown to if invested at the end of study
- 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 and return assumptions
- Foregone wages start at the current annual salary and grow each year at the user-supplied growth rate
- Part-time earnings during study are subtracted from each study year's foregone salary
- After the study period, cumulative net foregone wages are treated as a lump sum compounding annually at the investment return rate
- No taxation, no jurisdictional repayment thresholds, no investment fees
What this calculator doesn’t account for
- Doesn't model the salary increase the degree itself enables (use education ROI calculator for that)
- Doesn't include any salary growth that wouldn't have happened in the no-degree path
- Treats foregone wages as immediately investable — ignores the reality that they'd have been spent on living costs in any case
- Doesn't factor in employment risk (not getting hired in the no-degree path)
- Salary assumptions are user-supplied — the calculator can't validate them
Worked example
A student would have earned $45,000 in their first non-degree year, growing 3%/year, taking 4 years to study. They expect to earn $5,000/year part-time during study. The investment alternative compounds at 7% over 25 years post-study.
| Input | Value |
|---|---|
| Current annual salary | $45,000 |
| Salary growth | 3% |
| Study duration | 4 years |
| Part-time earnings during study | $5,000/year |
| Investment return | 7% |
| Projection horizon | 25 years |
Total foregone wages: ~$168,400 — Net foregone (after part-time): ~$148,400 — Invested value at year 25: ~$806,400
Year 1 foregone: $45,000 (− $5,000 part-time = $40,000 net). Year 2 inflated: $46,350 (− $5,000 = $41,350). Year 3: ~$42,742. Year 4: ~$44,166. Cumulative net: ~$168,260 over 4 years. If that lump sum were invested at 7% for 25 years post-study, it grows to about $806,400 — roughly 5× the original. That's the size of the wealth gap the degree has to close to be worth it on a pure financial basis.
Frequently asked questions
What is opportunity cost of studying?
The income you'd have earned if you'd worked instead of studied — and the future value that money would have if invested. It's a hidden cost of education that doesn't show on any tuition bill but typically dwarfs direct costs over a long horizon. A 4-year degree's opportunity cost is often $150k–$250k of foregone wages plus another $200k–$500k of foregone investment growth, depending on assumptions.
How do I calculate foregone earnings?
Take the salary you'd realistically earn in a non-degree job — your current rate or the going rate for someone with your experience — and project it across the study years with a growth rate. Subtract any part-time earnings during study. The total is what you're not earning to be at university. Real foregone-earnings figures are usually larger than students expect, because the salary in year 4 of study has grown above the year 1 figure.
Does part-time study reduce opportunity cost?
Yes — meaningfully. Working 20 hours/week at $20/hour for 48 weeks of the year is about $19,200 of part-time earnings, which directly reduces foregone wages each year. Over 4 years that's ~$77,000 less opportunity cost. The trade-off is potentially extending the degree (which has its own cost). The calculator handles part-time earnings as an offset; combine with the part-time savings calculator for the savings angle.
When is the opportunity cost too high?
When the post-degree salary premium can't recover the foregone wages plus investment growth within a reasonable horizon. If the degree adds $15k/year of premium but the opportunity cost is $200k of foregone wages plus $400k of investment growth, breaking even takes 30+ years. That's a financial 'no' even if the degree is intellectually rewarding. Use the education ROI calculator to see how the salary premium covers the opportunity cost over time.
Why include the investment scenario?
Because the alternative isn't just earning the wages — it's also having time for those wages to grow. Money earned in your 20s and invested for 30+ years has a much larger end value than the same money saved later. Excluding investment growth understates the true opportunity cost. The calculator surfaces this by showing both the cumulative foregone wages and what they'd grow to.
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