Can Your Child Afford Not to Go to College? Every so often, while helping one of my clients fill out forms for college savings accounts or financial aid for his or her son or daughter, the client confides that his or her child is reluctant to go to college. Given my line of work, I believe my clients expect me to provide guidance as to why their child should pursue a bachelor’s degree.

While I know a good education is the foundation of a child’s financial security, I don’t believe it’s my place to demonstrate the personal, social, and intellectual exploration that awaits them on a college campus. I can, however, provide my clients with some cold, hard facts about the current and future costs of college, as well as the salary gap that exists between college graduates and nongraduates.

How many zeroes was that?

According to the College Board,1 the tuition, fees, and room and board charges for in-state students at public colleges averaged $12,796 for the 2006–2007 school year. At a private university during that same year, those charges averaged $30,367.

The sobering reality for parents is that the cost of four years of college for their children will run four to seven times as much as their own education cost For a child born today, a college education will probably cost three to four times as much as it costs now.

If you’ve heard statements that suggest the cost of a four-year college education for a child born today will be in excess of $300,000, don’t go into shock. While this may be true for some, keep in mind that this number is based on the costs of the highest priced institutions. It also assumes gross prices, without taking into consideration that grants lower costs by 25 percent. If your child is bound for an expensive school, the good news is that the higher the cost of the institution, the more potential the student has to receive aid.

In any situation, however, with these large numbers staring at you it’s understandable why some parents and children may be reluctant to take on student loans, apply for financial aid assistance that seems to decrease each year, or commit to four years of learning that the child may not wholeheartedly want.

Think of it as a long-term investment, not an expense

While some students may look at college as a four-year vacation on Mom and Dad’s dime, they should be encouraged to look at it as a crucial key to their financial independence and one key to their ability to participate fully in today’s knowledge-based economy. Experts have measured the salary gap between high school graduates and college graduates, and the numbers are telling.

The U.S. Census Bureau conducts annual surveys of educational attainment. The following table illustrates some findings that can be derived from the 2006 survey data.2

Degree Annual Income
Age 18+:
All Workers
Lifetime Income
Age 25–64:
Full-Time Year-Round Workers

High School Graduate $26,933 $1,531,400
Associate’s Degree $36,645 $1,920,680
Bachelor’s Degree $52,671 $2,742,160
Master’s Degree $66,754 $3,337,800
Doctoral Degree $91,370 $4,449,440
Professional Degree $112,902$5,612,760

This shows that a bachelor’s degree recipient has lifetime earnings that exceed someone with just a high school diploma by $1.2 million, and a doctoral degree recipient has earnings that exceed someone with only a bachelor’s degree by $1.7 million.

With numbers like these, I believe it’s safe to say that education has never been more important to future financial independence.

1. Trends in College Pricing 2006 is based on data collected in the College Board’s Annual Survey of Colleges, 2006–07. It reports tuition, fees, and other charges for the current academic year, 2006–2007.
2. Educational Attainment in the United States: March 2006 published in March 2007, using 2005 income data. This data is collected as part of the national Current Population Survey.

Labels: Education, salaries

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