By Richard Laliberte
I recently made a bank deposit for a few months' worth of freelance work, then wrote a huge tuition check to my son's college. Afterward, instead of hunkering down again and getting back to work to bring in more money, I felt like having a stiff drink.
"Paying for college is a bigger deal than it used to be," says economics professor Richard Vedder, PhD, director of the Center for College Affordability and Productivity at Ohio University. "Higher education costs are rising faster than inflation, as well as family income." Years ago sending a kid to college might have taken 10 to 12 percent of household earnings, Vedder says. Today it's more like 25 to 30 percent. Average costs for attending a private four-year school are close to $30,000 a year, while in-state public universities run approximately $20,000—and expenses are rising 4 to 6.5 percent a year.
The limping economy has made the burden heavier while pushing higher education further out of reach for many people. The fix? "Families are borrowing," Vedder says. Two-thirds of graduates from four-year colleges carry substantial student loan debts—up 27 percent since 2004, according to the Project on Student Debt, an independent nonprofit group. Seniors at private schools graduate with $27,650 in student loan debt, while public school grads owe about $20,000. And many parents shoulder an added layer of "shadow debt," deficits not reflected in official college-cost reports. They may short-change retirement funds, take out large home equity loans, or put off major repairs like a new roof or furnace.
Yet conventional wisdom says college is an essential investment in your child's future. The vast majority of parents assume their kids are headed that way, and teens, in large part, are living up to expectations: Almost 72 percent enroll in some form of advanced schooling right after twelfth grade—an all-time high. But the triple whammy of dwindling or (nonexistent) family savings, crushing debt, and an uncertain job market has parents asking an unsettling question: Is college really worth it?