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In economic terms, the opportunity cost of something is the best aspect that a person gives up by making a choice between two or more mutually exclusive choices. To use a simple example, the opportunity cost of a person eating chicken for dinner might be having steak, assuming that he or she cannot have both. Any decision that a person makes involves giving up other potentially good options. The opportunity cost of college, for instance, consists of both monetary and time-related costs — the money the student could be making if not for going to school, and the time the student could be investing in other pursuits.
In the US in 2010, the average cost of one year's tuition and fees at a public four-year university was around $8,000 US Dollars (USD), not including books or living expenses. This might be considered the "explicit cost" for a year of college. The opportunity cost of college, or "implicit cost," however, is this amount plus what the student could have been making at another job, but is not because he or she is attending college.
The exact figure of course depends on what other job opportunities would actually be available to the person. If the potential student is an experienced electrician making $50,000 (USD) a year, the opportunity cost of college upon leaving this job would be $50,000 (USD) a year plus the explicit cost. On the other hand, this person might be a recent high school graduate with little to no job experience or practical skills, who would likely be making $15,000 (USD) a year in an unskilled position if not attending college, in which case the opportunity cost would be comparatively low. Interestingly, the opportunity cost of college is significantly lower in times of economic recession, when a person is less likely to find a well-paying job.
When considering whether the opportunity cost of college is worth the expense, a potential student should also consider the opportunity cost of not attending college. On average in the US in 1999, college graduates made $20,000 (USD) a year more than high school graduates who did not finish college. If the particular course of study is likely to provide the student with higher-paying job opportunities that would make up the opportunity cost in a reasonable amount of time, then attending college would be a good long-term financial choice.
Of course, money is not the only factor in a potential student's decision. College courses can be highly demanding in terms of time and energy as well. The time invested in attending classes, reading, studying, working on projects, etc., also has an opportunity cost in terms of what other activities the person might be doing. These activities might include gaining work experience, spending time with family, or even sleeping. This is especially true for nontraditional students — generally those who do not enroll directly after high school, as they are more likely to have spouses, children or an existing job.
Perhaps another concept students should consider is the skyrocketing cost of attending college. The average cost of going to college has outpaced increases one might expect would result from inflation, causing a lot of students to take on huge amounts of debts in the form of college loans.
By the way, those federally-backed loans are almost impossible to discharge in bankruptcy. Students are stuck with them and they'd better hope they get a job that will both allow them to retire those loans early and make a decent living.
Here's an example. I graduated from a snotty liberal arts college in 1991. The cost of tuition, room and board for attending that college for one year is equal to what it cost to attend for four years when I graduated. That's ridiculously expensive and there's no good reason why costs have gone up that much.