Balancing Your Expectations
$200,000 is an asset. No question.
But what if that $200,000 is wrapped in the sheepskin of a college degree? Does it still hold that value? Can you trade that value for employment advantage of equal value? How can you measure the true value anyway?
There is growing evidence that more and more parents and college-age kids are pausing before enrollment, now questioning the sticker price of a college education relative to future earnings. Money–before, during and after college–has become the primary and often deciding factor for millions of hard-pressed applicants, many foregoing top pick or “reach” schools in favor of lesser cost state schools or community colleges. While they’re at it they are, perhaps unconsciously, assessing the degree’s current and future value. Here are some interesting perspectives on that valuation.
Census Bureau data shows a significant, measurable difference in income for those with a college degree in 2008; though new data unfolding during our Great Recession suggests that there may have been some shrinkage in that gap since the Bureau’s measurement. A new College Board “Trends in Pricing” report also shows that the cost of college is now outpacing wage-gain, devaluing the notion of a degree to some point not yet clear. One new book seems to argue that student loans, long a point of contention for valuing education, should not total more than your expected annual income after college: a $50,000 income should translate to no more than $50,000 in total student loans.
My own suggestion is a bit of a hybrid. First, I would NOT borrow heavily to finance a college education. Instead of the first option being a “top” school, that should be the last option–if aid and scholarships can help you make a “go” of it. Second, my own favorite mantra, seriously consider starting your son or daughter at a community college. Yes, low cost is one factor here, but the truth is that most kids don’t have a clue what they want to do after high school. Community colleges, and a possible two year degree, offer a time to “sort things out,” and understand what comes next in one’s life. Two years is all many kids need. Finally, convince and remind yourself that a college degree has value beyond money. There is much to be said for intellectual development and the blossom of critical thinking as important tools for navigating and enjoying one’s life.
That has a value beyond measure.
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