Planning for the Future
According to 2011 studies by the College Board, those who attend college are much more likely to experience economic success later in their lives than those who only complete high school. Here are some specifics:
- A college degree increases earnings power and lowers the likelihood of unemployment.
- In 2010, median family income for those with a bachelor's degree or higher was $99,716 compared to just $48,332 for those with only a high school diploma.
But the College Board studies also found that while a college education is a worthwhile investment, it's also an increasingly expensive one. Students are going into significant debt to be able to afford it. Consider these supporting statistics:
- For 2011-2012, average yearly tuition and fees for private nonprofit schools rose 4.5% over the previous year.
- Public schools fared even worse, with their tuition and fees for in-state students increasing 8.3% during the same one-year period, due largely to decreased state funding.
- When you add room and board, the average cost of a private college education rose to $38,589 per year, up 4.4%, and the cost of a public college education for in-state students increased to $17,131 per year, up 6% from 2010-2011.
- Undergraduate and graduate students received $277.2 billion in financial aid in 2010-2011. Over the last decade, total borrowing by undergraduates to pay college expenses increased by 56%.
Understandably, many families are concerned about paying for their children's education. First Investors can help. We offer several possible solutions, from investment vehicles such as 529 College Savings Plans and Education Savings Accounts to IRAs that offer special provisions to help pay for higher education expenses.
