How Much Does College Cost (and Why It's Still Worth It)

The ever-increasing college costs probably have most of us scratching our head wondering if a college degree is really worth it. Will we really get a return on our investment? Before we answer that question, let’s take a look at what the real price tag for college actually is these days.

According to the College Board, the average cost of tuition and fees (fees may include the library, campus transportation, student government, and athletic facilities) for the 2016–2017 school year was $33,480 at private colleges, $9,650 for state residents at public colleges, and $24,930 for out-of-state residents attending public universities. 

These numbers do not include housing, meals, books or school supplies which could easily tack on another $10,000 to $16,000 a year. If you add room and board to yearly tuition and fee averages, a private nonprofit four-year college costs $45,370, while a public four-year costs $20,090. Now, multiply those numbers by four (four years of college), and you are looking at a really hefty college bill. It’s no wonder that the student debt crisis has toppled $1.3 trillion.

Footing the college bill can be a tough pill to swallow when you couple the costs with the fact that we may see graduates around us out of work. While I’m not recommending students pick up unnecessary student loan debt, I do think that there is enough evidence to encourage our children to go to college.

It's possible that your child may join the ranks of highly successful entrepreneurs that don’t have college degrees, but there is just a very small fraction of people who are going to become the next Bill Gates, Steve Jobs, or Richard Branson. These success stories are few and far between, and what these business leaders lacked in formal education they more than abundantly made up for in entrepreneurial skills, business savviness, drive, and passion.

According to the Bureau of Labor Statistics, the pay gap between those with a four-year degree and those with a high school degree is at a record high. Those with a four-year college degree earn a median weekly salary of $1,137, whereas employees with a high school degree average $678. The difference is even higher when comparing employees with doctoral degrees (the median weekly salary is $1,623) with those with some or no college degree (the median weekly salary is $738.) 

In fact, not only will college graduates make more money, but not going to college could cost you dearly to the tune of $1 million in lifetime wages. While you may wonder if these numbers apply to only graduates of Ivy League schools, the Economic Policy Institute numbers show that the benefits of college don’t just go to graduates of elite colleges, but to all college graduates with a four-year degree. Those with a high school degree face 17.9 percent unemployment versus 5.6 percent for college graduates.

Now that we've seen that a college degree is (more than) worth it, let's look at how the major you select can make a difference to your earnings down the road. A study released by Georgetown’s Center on Education and the Workforce reveals that the difference in lifetime wages for different majors is enormous. In fact, the difference between lifetime wages for the highest and lowest paying majors is $3.4 million!

The top paying majors unsurprisingly include STEM (science, technology, engineering, and mathematics), health and business. The majors with the lowest median earnings are in education, arts, and social work. Georgetown’s study is chock full of great information that includes tools that allow you to see the average income in various fields based on the degree obtained. I definitely recommend taking some time to check it out.   

Of course, it’s extremely important to note that our economy needs both teachers and engineers. We need social workers just as we need accountants. It’s easy to obsess over what major could make you the most money, but it’s more important to find something that you enjoy and where you could excel in the field.  

Have you wondered if a college degree is worth it? Before you decide that the price tag is too high, be sure to look at what the statistics show. If you are concerned about saving for college, check with a financial advisor to discuss a college savings strategy right for you.