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The Four-Year College Degree on a Budget

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College on a 4 Year Budget

Recently I met with some leaders at our local community college. We discussed soaring college costs and the student debt crisis. Higher education cost and subsequent costs are topics that seem to spill into most financial plans these days, whether you are a student or a parent.

Part of this meeting involved some very bright high school students who planned on attending college in the upcoming years. One of the students is very involved with their student government, sports and various volunteer activities.He comes from a family of teachers and his dream is to teach history to high school students.This is the type of young man who can do anything and his passion for teaching was an inspiration.

This young man had aspirations to go to a large, well-known out of state school. He would have had no problem being accepted; most colleges would fall over each other to have this gentleman attend their institution.The challenge that I saw: was a financial one.

Educating Our Youth, But at What Cost

The mission for colleges is to educate and prepare young adults for the workforce, with a secondary objective of providing the “college experience.” It’s a trial run at adulting.

The dream school of this young man would cost roughly $50,000 a year for tuition, not including room and board.Ignoring inflation and other complicating factors, this four-year teaching degree would cost roughly $200,000.

Viable Yet Pricey Solutions

The community college that was part of this panel discussion offers a “two plus two” program. The first two years of a college education are completed at a community college, then the latter two at a state-run institution. This community college, and most others, have affiliations with state run institutions to help ease the transition.

The first two years are $4,500 each and then the four-year school increases to a tuition of $9,000 per year. Therefore, a four-year degree would cost $27,000 going through the two plus two program, compared to the out of state school that would cost $200,000.

The only thing missing in this solution, is the living away from home “college experience.”In this scenario, the cost of this college experience is roughly $173,000. That cost goes up if loans are used to fund education because of interest expenses.

There are families that can afford to send their children to expensive schools without a major concern for the value of the education compared to other alternatives. There are many more families where the cost is a major factor. For these families anything that can be done to reduce the cost of higher education keeps retirement a possibility for the parents. It also keeps the chains of hefty student debt from getting tied to the student.

How Expensive is the “College Experience”?

There is a stigma with community college. Especially with the proliferation of online schools, does it really matter where the first two years of prerequisite classes are completed?If a freshman college student decides college is not right for them, wouldn’t it be better to find that out at $4,500 a year rather than $50,000 a year?

Related: Why Financial Success Begins with a Lucrative Career

College Is an Investment – Make It A Good One

We often overlook the fact that college is fundamentally an investment in ones’ career. Paying $200,000 for the same degree and career prospects as a $27,000 degree does not seem like a wise investment.That of course only looks at the financial aspect of this decision.

Weighing the Options

It is important to balance several factors when considering colleges.

  • What budget can I afford?
  • How much will my child be expected to pay now and later in the form of loans?
  • What is my expected return on that investment?
  • Are there lower cost alternatives that can accomplish the same goals?

The recent headlines have given attention to the top 1% who have cheated their children into schools. While that makes for interesting stories, more attention should be paid to how average hard-working families can get the most out of their higher education plan.

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