Your Financial Future
The cost of attending college is a major financial decision for many people. Average tuition and room and board in Pennsylvania is over $26,000 per year. Over four years this totals over $100,000. There are many universities that charge much higher rates. Out-of-state students attending public colleges or universities pay an average 76.27% more.
Many students get a discount off of the published cost through scholarships or grants. This can range from athletic scholarships to being a desired student because of high grades and test scores. With careful planning, you can determine which schools will offer you the best financial options. A good strategy for many students might be to attend community college for the first two years. Your final degree will still be from the more prestigious institution.
A number of factors that reflect the overall cost of a degree are squarely on the student. Changing majors or taking light credit loads can make your cost soar. It is important to plan your overall schedule carefully because some required courses are not offered all of the time.
Your choice to attend college could mean earning over hundreds of thousands of dollars more over a lifetime. The U.S. Bureau of Labor Statistics has calculated that Americans with a bachelor’s degree earn 68% more than individuals with just a high school diploma. Overall, bachelor degree programs generate a median return on investment of $160,000. Remember, median means this is the center point, with half below and half above. In fact, about 23% of graduates receive a negative return on their educational investments.
Certain majors have better returns on investment. According to non-profit FREOPP, the starting salary for jobs can give a good indication if your investment is likely to pay off. Degrees with a starting salary of $31,000 or less are unlikely to pay off. Degrees with starting salaries between $31,100 and $50,000 often generate modest lifetime returns, while those with starting salaries above $57,000 often generate a good return on investment.
While attending college is not for everyone, getting a degree can lead to greater income. Some majors such as engineering, computer science, nursing and economics often receive higher salaries and have more career options. Fine arts and humanities degrees usually produce lower salaries.
President Biden’s plan to forgive student loan debt is very controversial. People would love it if suddenly tens of thousands of dollars of debt simply disappears. Wouldn’t someone want their home mortgage to disappear? The problem is that these actions cost the American taxpayers trillions of dollars and increase inflation. There is also a major fairness issue. What about the millions of borrowers who did pay back their loans, and all of the citizens who never borrowed in the first place?
A better solution might be for the government to stop colleges and universities from raising costs so dramatically. Costs have increased much faster than general inflation for decades. They could do this because the government provides unlimited money for college loans. There should be opportunities to improve education at lower cost such as the internet. Students could reduce room and board and the institutions would not have to build and maintain large facilities. Also, guidance counselors in high schools could be increased to help students determine their best career opportunities and preferences.
If you have a student considering a post education choice, do your homework. Pick a major that can financially improve their life. This may mean not going to the school with the best football team or beautiful campus. Attending is a choice with lots of financial outcomes including cost and future income.