Is a college education worth the cost?

Let's start with numbers.
The average cost for a year of college varies widely depending on whether a school is in-state, out-of-state, public, or private. To further complicate matters, tuition and fees are one price, but the "total cost of attendance" - including housing, food, and other living expenses - adds even more variables. For the sake of simplicity, let's say that a four-year degree at an in-state, public college costs between $50,000 and $100,000 depending on whether the student lives at home or on-campus.

This is quite the expense.
When I was growing up in the 90s and early 2000s, the college-to-career path was fairly straightforward. We students were told people with college degrees earn significantly more over their lifetimes than those without them. At this time, it was also possible to earn a bachelor's degree with minimal student debt through a combination of scholarships, jobs, and frugal living. The tuition I paid at Arizona State University was about 25% cheaper than it is today. For reference, the overall inflation rate during that same time period was just over 2.5%.

To afford these higher prices, people have turned to loans. Today, about 50% of college graduates have a student loan balance after graduation, and the average balance is about $30,000. The average borrower takes about 20 years to pay off those loans. College is an investment, but one that a lot of people have been willing to make based on the promise of higher earning potential and additional job stability.

Things are different now.
Not only has the cost of attendance soared, but we are also facing a rapidly evolving AI landscape and a future job market that seems impossible to envision. On the face of it, it seems that jobs that don't require a college degree are less easily replaced than white-collar, computer-based jobs. It's no surprise that some parents are asking themselves whether saving specifically for college is even worth it now. Who wants to sacrifice now to save for something that might not be worth much later?

My perspective as a financial planner and mom of two young kids.
In my family, education is one of our core values. We believe that a college education offers more than preparation for future job prospects, like critical thinking skills, the opportunity to connect with people from different backgrounds, the value of working toward a goal while balancing multiple priorities, and many other skills and experiences that continue to benefit me 15 years after graduation. I'm saving specifically for college for my kids, and I'm using 529 college savings accounts to take advantage of tax benefits. I will share more about how 529s work in a future blog post.

For now, I am still a fan of higher education, and I am always, always a fan of planning for the future, even one that looks less predictable than we imagined it could.

If you'd like to talk through what accounts might make sense to set up for your kid's future, I would love to have that conversation.

Let's chat - it's free