By Taylor J. Kovar
CEO/Founder, Kovar Wealth Management
–Hey Taylor – My daughter is a sophomore in high school and I made the mistake of looking at some tuition prices recently. Why is college so expensive? Is it even worth it?
–Hey Liam – Makes your stomach turn, doesn’t it? It hasn’t been that long since I went to school, and I can’t imagine trying to cover these current tuition costs as a young student. You asked a two-part question, so I’ll give a two-part answer:
1. Why does it cost so much to go to college? Everything gets more expensive over time, and college is no different. However, while other industries can rely on technological innovations to increase productivity, universities rely on the skilled labor of teachers. To become a professor, you have to go through a lot of schooling and spend a lot of money on those degrees; to employ a good professor, colleges have to pay a premium. If the school admits more students to bring in more tuition money, they still have to hire more teachers to educate those students. Until we put robots in charge of teaching our future doctors, bankers, and lawyers, it’s going to be pretty hard to keep the price of higher education down.
2. Is college worth the price of admission? This question is entirely relative. For someone with the means to pay $50,000 a year, getting a degree from a good college seems like a sensible choice. On the other hand, I would never encourage an 18-year-old to go into debt for a degree that might not lead to a lucrative career. As important as education is, going to a four-year university isn’t the only way to become a successful professional these days. There are shorter, cheaper programs that can put students on track to start working sooner with less loan debt holding them back. Some people have a lot of success entering the workforce first and then going back to finish their education once they have a steady source of income and a clearer idea of what they want to do professionally. I think about this a lot with respect to my own kids, who are still young but have already started thinking about what they want to be when they grow up. Kids fall in love with the idea of becoming an architect or a CEO before they know what it actually takes to achieve those things. As parents, we have to help them find the most realistic path that will still allow them to reach their goals.
If the price seems too high for a certain school, look for another option. The burden of student loans puts a big damper on life after college, so see what you can do to avoid that borrowing and still get your daughter out there studying something that interests her. Good luck, Liam!
