College Degree for $500,000? Sooner Than You Might Think

How Expensive Can Harvard Get?

$500,000 for a degree from Harvard?

Sometime during yesterday’s keyboard tapping I ran into an article in the New York Times which began: “Want to pick up the tab at Harvard for a child born today? It will probably cost about half a million dollars come 2027.”

Though the balance of the article is about “small sacrifices” we all must make to send kids to college–doing without, squeezing savings to the max, looking for handouts from the government–I was more struck by the vast cost of a college education and the incipient threat of inflation which seems to peer over the money-printing presses of the Federal Reserve.

Point One: Explain Inflation to Your Kids

Trust me, your kids no nothing about inflation other than those stories you’ve told them about 30 cent gas and nickel beer night in “the old days.” They probably don’t quite believe you about that. Here is a learning opportunity, time for a good money lesson, one that I think might make an impression on them; and encourage a certain thriftiness and a thought or two about saving. See the three eggs above? $100 billion Zimbabwean dollars…about $33 billion per egg, with a little marketplace haggling. The inflation rate in Z-land? Recently it was 231 MILLION %.

Point Two: Plan for Inflated College Costs? Sure, But It Won’t Be Easy.

Though I’m not suggesting anything quite as dire for college education, it is a fact that if you have younger kids, you will need to save like crazy since income generally lags inflation, and the wrong kind of savings can devour monetary value quickly. There are ways to do this, including TIPS, which are federal savings bonds that adjust for inflation. But first, get a grip on the effects of inflation by using an inflation calculator to estimate the cost of a college education when the little one leaves high school.

Point Three: What About Now?

Inflation certanly isn’t a concern today, though many economists think it will be tomorrow–like within the next few years. If you are considering college for your kids, my advice is to err on the side of “clever college;” and there are many ways to do this. My favorite, as many readers know, is a one or two year stint at a community college, where you can save tens of thousands before transferring to a 4 year school, which is where the degree will be issued. I did this, and why more people don’t, I’m not sure. Other things you might want to consider is encouraging AP coursework to “place out” of certain curriculum requirements and taking on those 3 year degrees that are a combination of extra work by a motivated student and school programs which accommodate that purpose.

Like the Zimbabwean eggs, you can scramble for money now or later.

Any other ideas on how to combat the rising cost of a college degree?

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