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Is College Still a Good Investment?

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The troubled global economy isn’t producing good statistics in any sector and some of these statistics are painting college as a less than attractive expense for many families. Although college still remains the best way to thrive financially, making highly informed, detail oriented decisions is even more important. Gone are the days when parents send their children to the college of their choice with very little discussion of cost. The value gained by a college education is in danger of being severely offset by rising costs and lowering wages.

Take a four year public school like Florida State University. For a resident of Florida, the cost of room, board, books and supplies comes out to $11,000 per year. With tuition increase and other expenses, the four year cost would come out to approximately $53,000. A private school such as Princeton University will cost $175,000 for a four year degree. The average scholarship amount of a Princeton student who qualifies for a needs based scholarships is $24,000 per year while Florida State students receive an average of $5,000. There’s a big difference between these schools but the costs don’t stop there.

The average student graduates from college with $20,000 in college related debt. If it takes 20 years to pay that loan, at current interest rates, that loan will cost the student $36,600. It would be difficult to calculate an average cost of tuition since far less students attend schools like Princeton but in order to calculate the total cost of a college education, $36,600 would have to added to the total college cost.

Now that we have an idea of the total investment, what do the numbers on the other side look like? The average salary that a college graduate can expect is $46,000 per year compared to a non-college graduate who earns an average of 25% less. Possibly the most disturbing statistic is the unemployment rate. While the national unemployment rate is above 9%, the unemployment rate for recent college graduates is only 1% lower. Unlike a decade ago, there is no guarantee that a college degree with lead to a job and, in fact, a large amount of college graduates are either unemployed or in positions that are unskilled or don’t require a college degree.

Looking at all of the statistics, is a private ivy league school going to attract a higher paying job after four years compared to an in-state school? Is attending a high priced school for a degree that produces relatively low income a good return on investment?

Education majors who intend to pursue a career as a public school teacher will receive no extra money because they paid more for their degree while a lawyer may be more attractive to a law firm if they have a Harvard Law Degree on their resume. These are only a few of the questions that families have to consider in this economy more than in pre-2008 economy.

Regardless of current trends, a college education is still the best investment to make in yourself or your child. Although it may take 5 or more years to begin making a profit on your education costs, the investment quickly becomes profitable. Don’t let cost detour you from attending college.

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9 Responses to “Is College Still a Good Investment?”

  1. Darci says:

    I don’t think you add $36,000 to the cost, you ad $16,000 unless the $20,000 you borrowed was for living expenses. If that $20,000 was going towards tuition then the cost is already counted.

    As a financial aid professional, I see many students make poor financial decisions. I truly wish more parents were responsible with their finances and were able to instruct their kids/pay some of the college costs.

    • Justin says:

      That might be true, but at the same time the average family in america can barely handle the costs to live. So to pay some of the expenditures may not be an option while on the other hand, the student, likely can only pay the general expenses such as food, hygiene etc. while going to school full time.

  2. Darci says:

    I don’t think you add $36,000 to the cost, you add $16,000 unless the $20,000 you borrowed was for living expenses. If that $20,000 was going towards tuition then the cost is already counted.

    As a financial aid professional, I see many students make poor financial decisions. I truly wish more parents were responsible with their finances and were able to instruct their kids/pay some of the college costs.

  3. tom says:

    Also, not to mention that the unemployment rate for college grads is 4.6%, half the national rate.

  4. If a person is more of an “employee” type, then yes it’s a good investment. If a person is an “entrepreneur” type then maybe/maybe not. Also a person with a degree would most likely be hired for a professional position over a person without a degree.

  5. Shirley says:

    We have a daughter who received grants and worked her way through college ending up with no debt and a high paying (100k+) job in the computer field the same year she graduated. We have a son who is passionate about cars and didn’t go to college at all. Instead he dove head first into the auto industry, learning and enjoying as he went, and within 6 years he was managing the service and parts dept for a large dealership and making 95k annually.

    I think the most important decision has to do with the individuals and whether or not they are school oriented and have a passion for what they want to do in life.

    • Justin says:

      Very true. People forget that a person can or should be able to accomplish anything they put their mind to. College isn’t for everyone, but that shouldn’t mean they can’t be successful. Some people just can’t spend hours in a book like others, but may still have other ways to learn the same thing.

  6. partee875 says:

    One should be extremely careful when paying full price for a college education at a private University. Harvard might be worth it for business, but not if you are studying social work. You need to be smart about the choices you make. Student loans rack up quickly and pretty soon that 50k a year adds up to 200k. That’s almost unmanageable for anyone but doctors, lawyer, and IBankers. I know a lot of students who heavily regret their decision to study psychology for full price at a private university. And there are plenty of them out there.

  7. Justin says:

    college is too expensive. you’re gaining knowledge/learning, not being guaranteed a job. Even if you get a $70k/year salary upon graduation, after completing 4 years at an ivy league school, you will most likely still have loans upwards of $80k to $300k plus interest, to pay back.


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