The Cost of College

Hard Truth Alert: For most middle class or wealthier families, college will cost a fortune and tuition will increase faster than the yearly rate of inflation. A decent college option for your child costs a minimum of $25,000 per year, before any merit or financial aid. Since schools only keep 6 year graduation rates, we follow their assumption that it will take 6 years to matriculate. The cost is $150,000 for those 6 years. Your investment, however, is not for the 6 years but also for the additional 40 years of work your child most likely will put in. The math will tell you that the investment for those 46 years works out to be approximately $9.00 per day.

For most middle class or wealthier families, college will cost a fortune and increase faster than the yearly rate of inflation. A decent college option for your child costs a minimum of $25,000 per year, before any merit or financial aid.

Now, suppose we find an exceptional college where your child will get the best education in his or her field at $45,000 per year, again before any financial or merit aid. That costs $270,000 for 6 years; yet amortized over 46 years, the cost is about $16 per day.  A difference of $7 per day over 46 years is probably not worth worrying about, especially when one factors in inflation.  You need to think twice when you put the numbers to paper. Those who get the best education will acquire the best jobs and earn the highest salaries. Those who who economize and receive a college education of average quality and relevance will find that the marketplace has low regard for their labor. Worse yet, low pay at the beginning of a career is usually a career-long curse on one’s earnings (see here for even more).  Think twice about cost-cutting.

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