Today we'll cover Part 4 of a piece from Money titled "How to Make Sure Your Kids Will Live Better than You", an article that offers several ways to make this wish a reality. Here's Money's advice:
Strategy No. 4: Reach higher for education
For past generations, graduating from a good college was an almost surefire means to success. With degrees increasingly commonplace, however, future generations may need to kick it up a notch to get the same higher-education advantage.
According to the College Board, the median income of someone who graduates with a master's degree was $59,500 in 2003 -- nearly 20 percent more than the $49,900 earned by those with a four-year degree. A professional degree was worth $95,700, or 92 percent more.
And, yes, quality counts. A 2005 Cornell University study reports that students who attend better-rated colleges do indeed end up earning more than their counterparts at lesser institutions -- and that the boost to income from attending higher-quality schools is big enough to compensate for their typically higher cost.
So try bumping up those contributions to your 529 plan (or get started now), and steel yourself to the idea of paying those tuition bills somewhat longer than you'd planned. The ultimate price tag, though, may be smaller than you think if you send your child to a top-rated public institution. In fact, the same study found that attending highly rated public colleges packed the same earnings punch as comparable private schools, making them the better investment, in the researcher's estimation.
Ha! Does anyone find it "interesting" that a study from Cornell found that the higher cost of a better-rated school was worth it? I don't necessarily disagree -- it just depends on how you define "better-rated". If you mean that a school #1 graduate will earn more than a school #5,000 graduate, I can buy that. But I'm not so sure about the difference between school #1 and school #50. Maybe that's what the second part above meant.
Anyway, I'm a BIG believe in college and graduate school and have posted on the topic several times. here are a few of those pieces you might want to read for additional information:
The other question that should be ask is: Does it benenfit a person to enroll at Duke as an Engineering major but then switch to a degree in government versus enrolling at North Carolina State and actually getting a degree in engineering?
My guess is that too many people are paying Cornell prices for degrees that do not mean much and still depending on networking and snob appeal to make up the difference.
Posted by: superdestroyer | October 16, 2005 at 09:18 PM