The Financial Truths of a College Education

Written by  //  2013/01/09  //  Money Management  //  No comments

When you’re trying to decide whether or not to go to college, there are three main factors that you should consider: education, affordability, and career opportunity. Obviously your potential education is an extremely important consideration when weighing this decision, as your area of study may very well influence the professional choices you make for the rest of your life.

Career opportunity is tied to whatever skills or trades you study in college, and the value of each major once you enter the “real world” can vary drastically. The fiscal value, too, will vary depending on your major. A history major will probably make less than an engineering major during their career, and a business major is poised to earn more than would someone in the life sciences.

What about the cost of the degree itself?

Important Questions

Without a doubt, the affordability of your college education is the most practical factor when making your decision. How are you going to afford attending a four-year university? Outside of tuition, how will you be able to afford adequate housing and other expenses while you study? And finally, if you take out loans (and you definitely will), how realistically can you pay them back, assuming that you find a job after your graduate?
None of these questions are easy, and they’re far less fun to consider than picking your major, but you need to ask them of yourself if you want to be smart about the choices you make during your college education. Be honest with yourself.

Average Tuition Costs

College is expensive no matter how you look at it. Public state universities will usually cost less than private colleges, but the prices are still astronomical to any 18 year old looking at schools. College Board states that the average price of an instate public university is more than $8,000 per year, while at a private university it exceeds $25,000 a year. These are huge, life-defining sums, but they are also sums that you can manage, even if it seems impossible to do so right now.

As you well know, the federal government offers a variety of need-based loans and grants to students who apply for aid through FAFSA. Please, do your research before you select a school and the aid to pay for it. You should take a long time think about whether the intangible and tangle rewards of your college education will outweigh the costs.

Financials After College

A recent study done by CNN Money revealed that recent college grads are making less on average than those who graduated just a few years ago. This is a sad fact given that most college students assume that their post-grad jobs will pay enough to help with student loans. But the cost of education continues to rise, which means that student loans cost more now, and a person graduating now is making less than if they had graduated six or seven years ago.

The effects of high cost college education are taking a toll. The amount of American student loan debt outweighs credit card debit now for the first time in history. It paints a dismal picture for potential college students: young adults who barely know how to pay their bills are expected to repay tens of thousands of dollars as soon as they become employed. Of course this situation is by no means something that will happen to every college student, but it’s representative of an growing trend that desperately needs attention.

In the End, It’s Your Decision

This post isn’t meant to deter you from considering a college education. I simply want you to understand the financial realities of doing so. True, the picture can seem pretty bleak when viewed from a strict financial perspective, but most college grads believe that the benefits of an education—the experience, the friends, the connection, and the worldview—are worth all your efforts. Your job is to research every facet of higher education, beyond the three major considerations I named at the beginning, and decide if college is right for you.

 

About the Author:

Alvina Lopez is a freelance writer and blog junkie, who blogs about accredited online colleges. She welcomes your comments at her email Id: alvina.lopez @gmail.com. 

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