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Is College Still a Good Investment?

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 [3] 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.