One of the reasons many people put off going to college is because of the cost. It’s true that even a community college can be thousands of dollars, but is a college degree really too expensive?
What Do College Graduates Earn?
A 2014 report from the U.S. Census Bureau shows that a worker over 25 with a Bachelor’s degree has a median salary that’s 75% more than a worker with only a high school diploma.
The median salary for a worker with a Bachelor’s degree is nearly $47,000 while a worker with only a high school diploma earns just less than $27,000. A non-high school graduate’s median salary is only about $20,000.
Considering the $20,000 difference in salary, we can assume that a college graduate would earn at least $600,000 than a high school graduate over a 30-year career. If that $20,000 were invested at 5% each year, it would grow to more than $1.3 million.
A college degree clearly allows a worker to earn more money and create more wealth. But this isn’t just free money –a degree certainly comes with a price tag.
What Does College Cost?
We’ve looked at how much a college graduate can earn versus a non-college graduate, but are those earnings worth it? Keep in mind the numbers we looked at above are the median numbers for workers over 25. A worker in either category could earn much more or much less.
Let’s take a look at how the cost of education compares. These cost numbers are from CollegeBoard.com, who tracks changes in the cost of tuition.
4-year private university
This type of college is the most expensive. At an average of $37,390 per year, the total cost of attendance for 4 years is close to $150,000. The cost goes up if it takes longer than 4 years for the student to complete a degree.
4-year public university
Average in-state tuition is $18,326, bringing the 4-year total to a little more than $73,000.
Out-of-state tuition is higher for public universities at an average $29,193, the cost is almost $114,000.
Consider that these are average costs of attendance. It’s possible to find a college that has lower costs than those listed above. College costs vary by the type and location of the school.
Also, don’t forget that many fields require at least a Masters degree for a successful career — that increases the cost by at least 50% + wages lost by not working full-time for four years.
CollegeBoard.com says the most expensive schools are private colleges in New England and the least expensive ones are two-year colleges in the West. Public four-year universities in the South have lower fees than their New England counterparts.
Is College Too Expensive?
Even though the numbers indicate that a college education at even a private university can pay off in just more than three years, many people feel like college is out of reach. According to the National Center for Public Policy and Higher Education, 62% of people say that qualified people are unable to attend college. They also think that college is more important than ever. In the same study, 63% of people say that the cost of college is rising faster than the cost of anything else, including health care.
Even though the majority of people feel like college is too expensive, there’s no doubt about it’s necessity. So perhaps the expense is worth it.
A 2008 study from the Center shows that 78% of Americans believe students have to borrow too much money to pay for college. Surprisingly, 86% believe students can find ways to pay for college if they’re willing to sacrifice. And most agree that students will appreciate college more if they have to sacrifice for it.
Paying for College
College seems more expensive when the cost is coming out of your (or your parent’s) pockets. You can help offset the costs by applying for student aid in the form of scholarships and grants.
In the year before you go to college, make sure you fill out the Free Application for Federal Student Aid which is necessary if you want to receive any kind of federal financial aid, including student loans.
If you plan to pay for college with scholarships, you should start preparing as soon as you enter high school, in the 9th grade. There’s a lot of competition for scholarships, so you should diversify your college experience as much as possible.
Don’t rule out student loans. Though many student loan borrowers spend years paying back their student loans, you can pay them back sooner, if you make the necessary sacrifices as soon as you enter the workforce.
The earlier you prepare for the expense of college, the less expensive it will seem. If you think of college cost as an investment, even borrowing to fund your education makes sense. It’s been proven that college graduates make more over their careers than those who never graduated college at all. By the time you retire, you will have made far more money at your job than you paid for college.
Understand the FAFSA
There is some good information available at SimpleTuition – Understand the FAFSA that can help you to understand what the FAFSA (Free Application for Federal Student Aid) is. We recommend you check out this page and learn more about additional options that are available to you.