College is Worth the Expense

Let me just say this outright: college is worth the expense. That is, as long as you are smart about how you save and pay for it.

Here's another one of those "oh those poor college students, they are graduating with so much debt" stories that I'm seeing more and more of. Like all great journalism, it takes one small fact (some graduates have six-figure debts when they leave) and acts as if that's somehow 1) the soon-to-be norm, 2) something not totally unusual, and 3) that the people racking up this sort of debt don't have questionable judgment. Sheesh!!!!

I'm not even going to comment on the guy who has over $100k in debt from getting a graduate degree in public policy. Re-read that last statement a couple times -- I think it's self-explanatory where this guy went wrong.

Anyway, here are the real facts:

The average college senior graduated this year with more than $19,000 in debt.

Sandy Baum, a policy analyst for the College Board, a membership group for colleges and universities, says there's always been a "small subset" of graduates with unmanageable debt, but they're not reflective of the typical borrower. Among the two-thirds of graduates with student loans, she says, the median sum (half are more and half are less) is $15,500 for public-school graduates and $19,400 for private-school graduates.

"It's very important to understand that most students graduate with no debt or a very manageable level of debt," Baum says. "That doesn't mean we shouldn't worry about" those students who are weighed down by much larger debt, she adds.

And here's the bottomline -- hidden near the end of this long article:

Still, students remain willing to load up on loans in large part because studies have long shown that an investment in college pays off. The Census Bureau has estimated that college graduates will earn about $1 million more over their lifetimes than individuals with only a high school diploma.

This last quote is totally on the money -- as I wrote in College is Expensive, but Well Worth It Financially (Or: Give Four Years and $40,000 and Get an Extra $1 Million). Want to see some specifics on how a college degree pays for itself several times over? Check out these posts:

• Your Most Valuable Asset

• Maximize Your Career Earnings: Get a Degree and Manage Your Career

• Make the Most of a College Education -- It's Well Worth the Investment

• Why Education is So Important to Your Financial Future -- And How You Can Pay for College

• The Richest Man in Babylon: Seven Cures for a Lean Purse Part 7, Increase Thy Ability to Earn

This said, you want to minimize college expenses (of course) as much as you can. You can't simply borrow like a fiend and not think about the re-payment consequences. That's what this article misses that really burns me up!

So for those of you looking at ways to save for, save on, or pay for college, see these posts:

• Money Saving Tip: Save on College Courses

• Four Basic Ways to Save for College

• How Much College Debt is too Much?

• Money Saving Tip: Save on College by Studying Abroad

• 4 Ways to Save Big on College Costs

• A Great College Money Saving Tip

• Finally, to make the most of your college experience, see the Free Money Finance Guide to College Success