An Analysis Of The Cost-return Of Personal Investment In Higher Education

According to the human capital theory, education can improve labor productivity and total output, and ultimately increase the income of the educates through the enhancement of individual capabilities. With the development of the human capital theory, people gradually accept it, and think that the accession to education is not just a consumption. Like the material capital investment, it is also a main form of human capital investment which aims at gaining returns and raising the investment value.In recent years, with the expansion of Chinese higher education and the reform of its fee system, a large number of college graduates swarm into the talent market. This leads to the increasing studying costs and employment difficulties. More and more college graduates believe that they do not get the expected return after the investment of a large amount of material resources, money, time and energy. Under such circumstances, some people who have invested in higher education and are ready to invest in it begin to doubt the proceeds of higher education. In this paper, from the investor's point of view, the author aims at building a decision-making method for higher education personal investment with the help of human capital theory, and economics and financial investment theory, and thus makes investment decisions through the measurement, assessment and analysis of cost, return and risks in higher education personal investment. Monetary and non-monetary measuring methods are used to calculate the direct and indirect costs, and the direct and indirect returns of higher education personal investment. And NPV (Net Present Value) and internal rate of return methods are adopted to count and analyze the return rate of higher education personal investment. Through the comparison between the personal and social return rate of higher education investment, it is believed that the former is much higher than the latter. And from the perspective of investment cost return, it is proposed that it should be reasonable and necessary to go on implementing the cost sharing system of higher education. The matter of education equality possibly caused by the higher education fee is also discussed. The amount of the fee should be reasonable and acceptable by most of the Chinese people and many low-income families especially the rural students, and should be based on the social and economic development level. The systems of the higher education scholarship, financial aid and student loan should also be gradually improved so as to maintain the equality of higher education. Then, some suggestions to broaden the ways of raising education funds are put forward. In a word, the government, students and individuals should make efforts to carry out the higher education personal investment strategy.Although it is profitable to accept higher education, the author still proposes some suggestions for the individuals to invest rationally in the end of this paper. This is because, theoretically speaking, there exist risks in any investment including higher education investment. Therefore, the individuals and families must change their mind before investing in higher education that holds higher education will bring out higher return. They should have a good idea about themselves and bear the risk awareness in their mind in order to make a better profit and higher investment return rate with much more rational investment in higher education. For this purpose, different suggestions are given to guide individuals and families investing higher education to make rational investment and decisions.