Cost benefit analysis is the most appropriate way of making an informed decision on whether to proceed with a particular project or not. The decision is usually based on the analysis of both expenses (costs) and income (benefits) of one’s project or program. Cost/benefit analysis helps to minimize risks by increasing chances of project or program success. It ensures that a project is only undertaken upon a confirmation that its benefits outweigh its costs. It monetizes all non-monetary costs and benefits and also makes it possible to prioritize the most cost-effective alternatives. It is therefore an ethical critique to one’s decision to undertake a certain project (Mishan, 2015). Pursuing higher education is a decision that requires knowledge of both costs and benefits, since it involves huge investment of money and other resources that could be invested in any other project. My decision to advance my studies is informed by a cost/benefit analysis that compares between its costs and benefits to establish its feasibility. Its opportunity cost is also analyzed to determine the cost of the best foregone alternative which could have been equally helpful.
The Cost of Pursuing Higher Education
Pursuing higher education is a complex project that requires wise planning and critical analysis of the amount of resources to be invested, including the amount of time to be spent on studies. This means that other programs have to be foregone, including the time that would have been spent on other productive projects and activities. The most notable investments or costs of pursuing higher education include: Registration fees, the required tuition fees for the entire duration of studies, transport costs to and from the college, accommodation expenses, research expenses, investment in learning resources such as personal computer, books and pens, examination fees, graduation fees, and emergency expenses. These expenses are briefly tabled below in relation to their estimated costs:
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| Cost | Specific Expense ( Est ) | Total Expenses (Est) |
| Registration fees |
$ 150 |
$ 150 |
| Tuition fees |
$ 1,200 per Academic Session for 4 Sessions |
$ 3,600 |
| Transport expenses |
$ 3 per day for 360 days |
$ 1,080 |
| Accommodation expenses |
$ 500 per session for 4 sessions |
$ 2,000 |
| Research |
$ 700 for 1 session |
$ 700 |
| Learning resources |
$ 800 (Approx) |
$ 800 |
| Exam Fees |
$ 50 per session for 4 sessions |
$ 200 |
| Graduation fees |
$ 100 |
$ 100 |
| Emergencies |
$ 200 |
$ 200 |
| Total |
$ 8, 830 |
Benefits of Pursuing Higher Education
My decision to pursue higher education can only be informed if it leads to more benefits compared to the cost of its expenses. A sound analysis of the projected benefits is vital in comparing between the total amount invested and the benefits gained. There are both long-term and short-term benefits of pursuing higher education which I anticipate to gain upon completion of my higher education studies. These benefits include: Promotion from my current job position to a higher position leading to salary increment, increased technical expertise to initiate and run my own business, improved privileges such as medical and housing allowances and overall job satisfaction. Although these benefits cannot be represented in their exact monetary terms because of their long-term and complex nature, analysis of the project benefits is a useful tool for the determination of the feasibility of the program. Based on a current net salary of $2,000, the cost of pursuing higher education and its benefits can be compared in the following ways, on a presumption that the percentage salary increase immediately after graduating will be 15%.
Comparison between Costs and benefits of Pursuing Higher Education
From the table above, the total cost of pursuing higher education can be compared as follows:
An increase in salary by 15 % leads to long-term benefits that will recover part of the expenses in the long-run.
Acquisition of technical expertise will make it possible to initiate and run my own business, increasing opportunities of earning more. Alternatively, I will be able to offer technical advisory services at a fee, considering that my professional capacity will have improved. This leads to almost double my monthly income.
Job satisfaction is what everybody is looking for. This occurs concurrently with increased motivation and job security which are potentially beneficial.
Other privileges such as increased housing allowance, medical allowance and risk allowance adds up significantly to the total income. In the long run, the retirement benefits will also rise.
Opportunity Cost of Pursuing Higher Education
Opportunity cost refers to the cost of the best foregone alternative. My decision to advance my college studies can be compared to an alternative decision to purchase a luxurious car. By choosing to enroll for higher education, I will be paying the cost of purchasing a car. Compared to the benefits of purchasing a car and the benefits of undertaking higher education, I will be settling for a priority and leaving aside the luxury, which can be attended to later on. This confirms the feasibility of my decision.
Research has confirmed that the benefits of both bachelor’s degree and associates degree greatly outweigh its costs, with both degrees earning a return of 15 percent over the past decade. In spite of the rising tuition fees, the returns have remained high even though there has been a fall in the earnings after graduation (Abel & Deitz, 2014).
Conclusion
Compared to the cost of enrolling and pursuing higher education, both long term and short-term benefits of higher education outdo its costs. Therefore it is feasible to make a decision of pursuing higher education in the light of its benefits as shown above.
References
Abel, J. R., & Deitz, R. (2014). Do the benefits of college still outweigh the costs?.
Mishan, E. J. (2015). Elements of Cost-Benefit Analysis (Routledge Revivals) . Routledge.
