Does College Add Up? Try This Formula
By Jay Alan Zimmerman
NEW YORK (MainStreet) --We all know college is frighteningly expensive, as I learned first-hand when my high school senior started applying to top-tier schools--hitting me with a extreme case of sticker-shock. But is it worth the money? That's the fundamental question running through the national discourse, not just through the minds of anxious fathers like me.
According to the Center for College Affordability and Productivity (CCAP), college tuition increased 757% in the past 30 years--almost double the rate of increase for healthcare and more than five times the rate of increase for food. Sure, the odds are good for receiving a "discount" via financial did, but if aid formulas don't compute in your favor, it might be worth debating if earning a degree is the best use of $250,000. For that pile of cash we could get our son a little condo on a beach and he could dive right into work at a local surf shack. Sounds nice, right? He loves surfing almost as much as physics and math, so why even bother with college at all?
This question might seem odd to someone who comes from a family of degree-holders. And somehow, despite these mounting costs, the number of college-goers keeps increasing. For the first time ever, a Pew Research Center analysis of census data shows fully one-third of the nation's 25- to 29-year-olds completed at least a bachelor's and more than half attended at least some college.
It's also a question Jonathan Robe of CCAP recommends starting with when sitting down with your teenager to discuss future options. He says parents and their high-schoolers should of course closely examine the costs of various institutions and the likelihood of receiving financial aid. "But it is also important for them to look at the probability of graduation and of employment after graduation," Robe said.
In other words, don't just look at the general data that shows people with degrees earn more than those without; you have to go deeper. For in spite of the lovely graphic on StudentAid that shows escalating payoffs for higher degrees, it's no guarantee (i.e., I live in New York City, a town filled with the most highly-educated waiters in the world). But if your teen is savvy enough to know what career path he wants to follow, Robe recommends researching the salary potential by major and estimating how much they are likely to make in their first job. Payscale.com ranks all the majors by starting salary potential, with "petroleum engineering" topping the list at $98,000 per year. Sadly my favorite field, the arts, sits near the bottom in the $30,000 range, and they've completely left off my dream job: Rock Star.