Personal Finance 

Putting College Costs Into Perspective

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If you have any high school kids, you probably have paid particular attention to news articles that talk about the rapidly increasing price of college these past few years. At many private schools, the price of a single year of college is over $30,000, which puts a four year degree at around $120,000 per child. Those are scary scary numbers for anyone who ever plans on having kids who will want to go to college but the College Board, a not-for-profit membership association that tries to connect students with colleges, puts these into perspective – which will probably take a heavy weight off some people’s backs and something I thought worth writing about because the big boys won’t (it’s not as exciting to dispel myths as it is to perpetuate them).

College Is Too Expensive – The average lifetime earn of a college graduate is a million bucks more than someone who is just a high school grad and the statistic doesn’t take into account whether you went to a public or a private school. The average yearly cost of a 4-year public school is only $5,836. Six grand is a lot more palatable than thirty and within the reach of more folks than thirty.

Not Enough Financial Aid Around – Over $134 billion was handed out in financial aid and while the amount in grants (free money) may have decreased, but its been replaced with low-interest loans, college grants, and other grants. Personally, I received about $10k a year in grants from the school and an extra $8k in Stafford Loans.

If I Apply for a Loan, I Have to Take It – This is actually a misconception a lot of people have about any loan, just because you apply for a loan doesn’t mean you have to accept it! Most people who apply for a loan will accept it but sometimes you just want to see what sort of rate you’ll get and that rate plays an important role in your decision, so if you get a rate that’s not favorable you can always walk away. Think about if I wanted to lend you $10, you don’t have to take it. (if you had to take it, then they could just say you have a loan for 20398420398423% interest…)

There are more myths in the article so give it a look see.

Source: College Board

{ 4 comments, please add your thoughts now! }

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4 Responses to “Putting College Costs Into Perspective”

  1. Yeah I used to have somewhat lessened feelings about the importance of college, but basically if money is a concern you cannot afford NOT to go to college. It’s by far the easiest way to get ahead financially. Yeah people like Bill Gates, Steve Jobs, etc did it without a college degree, but they are the exception, not the rule. The other 99.9% are making significantly less than if they would have gone and had a blast at college for 4 years.

  2. eROCK says:

    Most public colleges/universities in the Northeast are around $11K average per year over four years, but much cheaper then private Universities.

    I had a choice between private and public and I chose private. I paid roughly $75K for three years because I got an associate degree before hand to cut costs.

    Looking back, I’m not sure if I made the right decision, but it seems my University’s name opens more doors then a public school does. My g/f will be graduating from a public school within the next year, it will be interesting how her job search and starting salary look in comparison to mine.

  3. MossySF says:

    I’ve been part of handling the hiring the past few rounds of new employees and basically, when we get the resumes, we have don’t have an ounce of knowledge about the schools outside of the local ones and the top ones like Harvard, Stanford, MIT, etc. It’s like “huh? where did this person go? is this a good school?” In the end, all candidates get the same score for having degree+field regardless of “school quality” because we don’t have time to check out every school for the volume of resumes received.

    So my opinion is that if you go to a private school, you absolutely have to make connections with the wealthy elite or the super driven talent to get your full money’s worth. If you were roommates with Bill Gates (before he dropped out), he probably would have called you up and asked you to work for him at some startup called Microsoft. Or perhaps you were drinking buddies with George W. Bush in college — that’s the right qualifications to become Secretary of Agriculture.

    If you have less lofty goals, AP exam credits, community college, local public colleges, working part-time while in school and so on will probably get you a degree with minimal costs.

  4. mapgirl says:

    Where did Jerry Yang and Dave Filo meet? In graduate school. Where did the founders of Facebook start? In college. Where did Michael Dell start his company? In his dorm room. I’m a drawing a picture here? They’re worth a thousand words.

    College, beyond the future wealth of a graduate, is a great time to grow up without being totally out there in the school of hard knocks. You can make some mistakes in college and not fall down completely. It’s worth it for all the non-financial reasons too. I learned so much about people while I was in school, much more than I did in high school. My deepest friendships are my friends from college with whom I talked about everything and nothing for hours on end over beers and coffee.

    You could argue that I wasted my time going to college because I’m not a professional geographer, but that was never my intention in the first place. My intention was to be an archaeologist! Thank god college disabused me of that notion. I learned through work study, that I liked working and making money over hitting the books. I got my first IT job through some college friends and nearly every time in life that I’ve really cracked up, my college friends were there to help me pick up the pieces.

    Sure I hated many things about college when I went, but with my crystal clear 20-20, I’m very glad I stuck it out for four years and completed my degree. FWIW, even if no one recognizes your school’s name or what it’s famous for, it’s better to have it than not. When it comes down to two candidates, I’ve almost always seen the edge given to a college graduate. Also, I worked at one really crazy place where they only hired college graduates. Even the lowest lackeys had degrees. The management was nuts and passed up a lot of great candidates and referrals, but I loved the people I worked with because almost all of them were pretty darned smart and interesting.

    Ok. I’ll stop now. 🙂

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