Is a university degree worth it? Data shows it pays off — but less than before

Some university graduates are seeing less of a return in their incomes compared with the tuition they paid in the final years of their studies, an RBC analysis shows.

Going back for more studies after high school is still proving a path to better earnings for students in the years after graduation, but a new Royal Bank of Canada analysis shows the returns on investment aren’t paying off like they once did.

A report from RBC economists Rachel Battaglia and Abbey Xu released Monday compared the average median income five years on for 2017 graduates with the tuition levels in their final year of study.

After adjusting for inflation, tuition rose 12 per cent between 2012 and 2017 for undergraduate students, compared to a jump of four per cent in median incomes for grads from 2017 to 2022.

The gap widens by more than eight per cent among degrees such as architecture and engineering, Battaglia and Xu noted.

Engineering grads in 2012 were earning a median of 12.3 times the rate of the final year of tuition five years later, while 2017 grads were raking in more than 10 times the annual costs of tuition in their last year.

The report noted that despite the relative declines, university degree holders continue to earn higher wages than those with lower educational attainment.

“It’s worth noting that median incomes for engineering graduates are still among the highest of undergraduate degree holders—and (relative to final year tuition) provide a more generous return to tuition investment than most programs,” the report said.

Those with a bachelor’s degree or higher had a median income in 2021 of $61,600, up 44 per cent from the overall median income in the sample analyzed by RBC and more than double the earnings of those with a high school or equivalent diploma.