College is an investment and this tool may help you quantify the return.
College costs have continued a sharp upward trend for over two decades, making it cost-prohibitive for some families. This significant increase in costs has caused some to question the utility of college in the long-term.
This short post highlights a tool allowing future attendees and their parents to compare the cost of attending college with the projected future financial benefit. If readers find this helpful, please contact me as I am considering writing a much more detailed evaluation of college as an investment.
Good News
Prospective students and their families now have a way to gauge whether a degree from a college or university is worth the initial financial outlay. Go to the Department of Education’s College Scorecard to compare the earnings of recent graduates from most institutions.
Most helpfully, the scorecard also shows what percentage of graduates earn more than a typical high school graduate—making it even more helpful to evaluate the benefit of attending a specific school in a certain field.
Why Attendees Need To Seriously Evaluate the Costs
In the past, college meant a chance to improve your earning potential. By fine tuning your craft or becoming an expert in a high-demand field, college attendees could anticipate making enough money upon graduation to repay its costs within a reasonable time. Unfortunately, it is becoming more common that graduating college may not only fail to increase your earning potential, but it will saddle you with lifetime debt that can overwhelm your ability to achieve other financial goals.
College is an investment. It is both a financial investment and an investment in yourself. And just like any other part of your portfolio—the risks (in this case its cost) should be evaluated in relation to its reward.
My advice: College is more than just an education in a specific field, it is also an experience that may enrich your life. However, that enrichment becomes less meaningful if the cost of attending financially devastates you or your family’s long-term future. Research not only the way you plan to finance your education, but also the utility of your choice of industry and school before making potentially a poor investment.