Useful Stats: Educational attainment and financial health

While there has been increasing public questioning of the value of a college degree, statistics on net worth by educational attainment paint a clear picture. In 2022, the median net worth of those without a high school diploma was approximately $38,000, while those with a college education sat at around $464,000. When looking at averages instead, the difference becomes even more pronounced, with non-high school graduates averaging a net worth of approximately $176,000 compared to college graduates’ $1.92 million.

This edition of Useful Stats explores Survey of Consumer Finances (SCF) data from the Federal Reserve, breaking down American’s finances by their educational attainment through a deep dive into the makeup of their assets and debts.

Net worth by educational attainment

Net worth is equal to a person’s assets minus their liabilities, and is oftentimes used as an indicator of financial health over metrics like income due to it being a constant, holistic measure.

Figure 1, below, shows a breakdown of net worth, assets, and debt by educational attainment in the United States for years between 1989 and 2022, where data is available. The median net worth for all levels of educational attainment has increased over time, but the gap between the highest and lowest levels has widened.

In 1989, the median net worth for those without a high school diploma was just under $56,000, while that of college graduates was over $293,000. However, in 2022, the median net worth for those without a high school diploma was $38,000, compared to those with a college degree at $464,000. All dollar variables have been inflation-adjusted to 2022 dollars.

This drop in median net worth for those without a high school education was due to a decline in assets and an increase in debt. College graduates, on the other hand, saw their debts increase, but their assets increase much more, leading to a large jump in net worth.

Individuals with high school diplomas are slightly better off financially than those without and slightly worse than those who completed some college. There is, however, a large divide between those with a college degree and those without.

Figure 1: Graphs showing median, mean, and percent holding net worth, assets, and debt.

Those with less than a high school diploma both have the least amount of debt and the lowest percentage of their population holding debt. This trend follows with high school graduates. Those with at least some college have a very similar percentage share of debt, around 80% in 2022, but college graduates have significantly higher amounts of debt.

Asset holdings by educational attainment

Net worth, being a holistic measure, provides insight into high-level trends. But digging deeper into both the assets and liabilities of Americans can provide insight into why the disparities in net worth exist.

Figure 2 below shows selected investment and innovation asset holdings captured by the Federal Reserve’s Survey of Consumer Finances.

The largest differences can once again be seen between those who have a college degree and those who do not. This difference is especially true for the amount invested in pooled investment funds (investment funds like stock, bond, or combination mutual funds), retirement accounts, and business equity.

However, this trend only stands when looking at the dollar amounts; the percent holding each of the following is quite different.

In 2022, just 17% of those without a high school diploma had a retirement account. The other metrics are even lower, with under 7% having business equity, 4% directly holding stocks, under 3% with CDs, and under 2% pooled investment funds.

As educational attainment increases, a larger percentage are saving money for retirement, increasing from 17% without a high school diploma to 38% with a high school diploma, 50% with some college, and 75% with a college degree.

Other metrics, such as directly held stocks and business equity, follow a similar pattern.

Figure 2: Graphs showing median, mean, and percent holding selected assets by educational attainment.

Debt holdings by educational attainment

Home-secured debt (the total of mortgages, home equity loans, and lines of credit of primary residencies) has the largest median and average amount of any debt across all education levels. Those with higher educational attainment tend to have higher dollar amounts of home-secured debt, matching the trend that the percentage holding any home-secured debt increases with education.

Education installment loans are much higher for those with a college degree than those without one, but similar for those with a high school diploma and some college.

See Figure 3 below for more trends in debt.

Figure 3: Graphs showing median, mean, and percent holding selected debt by educational attainment

The data used in this article can be accessed and downloaded on the Fed’s website here.