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As college costs continue to soar and with unemployment still at uncomfortably high levels, more and more people are asking an important question. "Is college worth it?" The answer to that question is not as simple as it would appear on the face of it. Tuition increases every year and that will never is not likely to change. Even parents who started saving before their child was born have a high chance of footing the bill by taking out or co-signing on loans to pay for college expenses. Even so, research consistently shows that people with four-year degrees earn significantly more in their life times than high school graduates. How much more? Factoring in the cost of the education itself, the average four-year degree holder stands to earn about $550,000 more than someone who stopped at high school.[1] Is college worth it? The answer seems amazingly clear, right? Not so fast. That half million dollars in additional earnings is just an average and varies greatly. Let’s consider a few things:

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Consideration #1: Examine College Costs Closely:

Whether you have just started looking at schools, are currently enrolled, or have graduated, you know that college costs can vary significantly from institution to institution. Community colleges tend to be the most economical, followed by state, then private schools. Your out-of-pocket costs for each type of school varies greatly and can determine college costs and future college debt. Looking squarely at the cold hard cash cost of attendance, this is how the different schools measured up in the 2012-2013 year:

  • 4-Year State Colleges: Students who attended their state school paid an average of $2900 a year after factoring in grants (i.e. federal and/or state grants, external grants and scholarships, and institutional grants and scholarships), loans and tax credits.
  • 4-Year Private Colleges: Four year private schools were the most expensive on average. Students paid an average of $13,000 a year after grants, loans and tax credits.
  • 2-Year Colleges (Community Colleges): Two year schools were the least expensive with students effectively paying nothing after grants and tax credits.[2]

It’s important to note that these expenses do not include room and board, so if you are planning to live on campus, tack on another $10,000. It is also important to note that college costs start to increase as family income increases because family income dictates eligibility for some types of financial aid.

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If college expenses can be paid without taking out loans, then students have effectively increased their earning potential after they graduate because they don’t have to worry about paying back debt. If students do have to take out loans, it would be far better to incur lower college debt by selecting a less expensive school than one with higher tuition. So, is college worth it if you choose a lower cost one to attend? A logical conclusion might be yes! But not so fast! It still depends.

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Consideration #2: Does it Matter What You Major In?

Do college majors really make a difference? Yes, in many instances they do. Many school administrators gloss over this fact, telling students instead, “Do what you enjoy and the money will follow.” I am actually a big proponent of this idea because our careers take up a large portion of our lives and it’s better for our souls if we can work at something we enjoy. If work is more like play, you won’t regret it. However, with the reality of more than half of recent college graduates being unemployed or underemployed at jobs that I am sure they never envisioned doing with a degree[3], it is worth examining the relationship between college majors and college costs.

So what college majors are worth it? Majors that lead to careers needing a specific skill such as business, accounting, computers and engineering can have a much bigger financial payoff than majors such as liberal arts or history. Sadly, students who major in education earned only $80,000 more over their work lifetime than high school graduates.[1] Personally, given the importance of great teachers in this country this is a travesty. Even worse, the additional earnings could be wiped out if students attend an expensive school and rack up enormous college debt. That’s not so hard to do, especially if you are incurring other college expenses such as room and board.

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Okay, so is college worth it if you attend a lower cost school and select a college major that will earn more money? Well … maybe. It depends.

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Consideration #3: Does it Matter Where You Go to College?

There are differing opinions on the answer to this question. An elite college certainly provides bragging rights and if attending a more prestigious school means making significantly more money over your lifetime, even if that means taking on more college debt, it’s probably worth it, right? Once again, it depends. Research shows that unless you go to a top-tier school (think Harvard and Yale), what’s more important to future earning is the college major selected.[4] In other words, when trying to decide between the two, it’s important to look at your choice of major. If you are interested in a college major that is on the lower end of the pay scale once you graduate, it may be better to attend a less expensive school. If you’re pursuing a major that leads to a career on the higher end of the pay scale, a highly ranked school, especially one that specializes in that field of study may be worth it. Okay, so … does it matter where you go to college? Well before you decide, consider one more thing.11/365:Credit: anieto2k:

Consideration # 4: Not Everything is about Money. What about the College Experience?

A product of a university education, as well as having worked with many, many students over the years, I do personally believe that the college experience is invaluable. But it is also important to ask what it is worth. While studies show that a healthy 74% of students believe that higher education provides an opportunity for intellectual growth and 69% believe that it helps them to mature, an underwhelming 55% believe that it actually prepares them for a job. Worse, when compared with high school graduates, college graduates don’t find their jobs much more interesting (53% of college grads vs. 51% of high school grads). Even so, a very high percentage of graduates (86%) believe that it was a good investment.[5] During my most cynical moments I sometimes wonder if the belief is simply the result of brainwashing that happens when spending a gazillion dollars on that education and a good portion of your life paying off college debt. You almost HAVE to say that it was worth it or how much self-loathing would there be? 

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In all seriousness All kidding aside, the college experience is something to factor in. Amenities vary significantly. Smaller versus large class sizes. Residence halls. Special classes. Extracurricular activities. Career development opportunities. Connections with alumni who can be helpful in your career. Life-long friendships. They are all important aspects of the college experience. However, all of this will mean nothing to your future if you do not fully take advantage of it. Schools with fewer amenities can offer a marvelous college experience. It really is what you make of it.

So, what’s the verdict? Is college worth it? Ultimately each person needs to decide, but hopefully these considerations are helpful when weighing your options.