Over the last few years, many experts have weighed in whether they think a college degree is still a good investment. In most cases, they focus in on the return on investment for each dollar spent, or ROI. In other words, they compare the cost of college with the higher earnings those with college degrees usually bring in and measure the difference.
For the most part, experts agree that yes, college is worth it. For example, an analysis of Labor Department statistics by the Economic Policy Institute in Washington recently showed that college graduates made 98% more an hour compared to those without a college degree.
Meanwhile, Georgetown University’s Center on Education and the Workforce found even greater benefits for those who earn advanced degrees. According to their research, adults who earn an advanced degree can reasonably expect to earn as much as $2 million dollars more than someone with a high school diploma. That’s a lot.
Is the Cost of College Worth It? Usually.
Personally, I believe that a college degree can be a bad investment under certain conditions. For example, paying $90,000 to earn a four-year degree in a low-paying field may leave you worse off than learning a trade and heading straight into the workforce.
But those type of cases are rare. Like it or not, study after study shows that earning a college degree is almost always the ticket to higher earnings. And it leads to something that I think is even more important – choices. When you have a degree, you usually encounter a larger number of opportunities and career options.
How I Plan to Save on College
Since research shows that college is a good investment the vast majority of the time, I have been saving for my kid’s college education since they were babies. I believe that my children will be much better off if they graduate from college, which is why I have chosen to put my money where my mouth is. If the money I save up to get my kids through college is enough to put them on that path, then it will be money well spent.
With that being said, there are plenty of strategies I hope to use to cut down on the costs of my children’s education, including these:
- Letting my kids live at home – We live near plenty of colleges, universities, and community colleges. I would love to let my kids live at home while they study and pocket the money we will save on campus housing.
- Starting with community college – I would love it if my kids went to community college for a year or two before transferring to a four-year school. The savings for doing so can be huge.
- Experimenting with online colleges – Online education has garnered a lot more credibility over the past few years, and I can only assume that it will become more prevalent over time. Thirteen years from now, when my daughter is ready to enter college, it might even be the norm! Either way, I’m up for it if it saves money and leads to a similar outcome to an on-campus degree.
- Paying as we go – Since our state offers an extremely generous tax credit on the first $5,000 we contribute to a 529 plan each year, we have saved since our kids were babies. Hopefully that means we can pay for college as we go and avoid the expense of student loans or student loan interest altogether.
Another way we plan to make sure our kid’s college educations are “worth it” is to (hopefully) talk them into earning a degree that can lead to an actual job. A Master’s degree in Pop Culture may sound like a boatload of fun, but that doesn’t mean it is a good investment. I am actually hoping that my kids will get into a vocational career with low start-up costs and huge potential. And hopefully, they will want to get part-time jobs during school to help cover their expenses. I could see either of them working in the restaurant business like I did, babysitting, or even freelancing. Any extra money they earn can help pay for school, transportation, or living expenses.
Is a college degree worth it? According to most of the experts, the answer is a resounding “yes.” And for my children’s sake, I hope they’re right. If not, the money I worked so hard to save will go straight down the drain.
But hey, at least I can say I tried.
Do you think a college education is worth the money spent? Are you saving for your children’s education?