Is College Worth the Investment

Melissa Cox CFP® CFSLA

Is College Worth the Investment?

One question that comes up regularly when families look ahead to planning for college: is college worth the time, effort, and expense? Does one need a college degree to have a comfortable lifestyle?

The short answer is “yes", those who graduate with bachelor’s degree earn 33% more than their high school educated counterparts. However, we need to further dissect it to better understand this statistic. Where you attend school matters, as well as your intended career and major. What type of education are you looking towards? Are you interested in a bachelor’s degree or perhaps technical school?

Consider Your Educational and Financial Goals When Investing in College

Melissa Cox CFP® asks you to consider your goals before investing in college.
Melissa Cox CFP® asks you to consider your goals before investing in college.

These are all important aspects of planning that we can work through to find the best educational and financial outcomes that will benefit everyone in your household. My goal at Cox Collegiate Financial is to assist your entire family to create a holistic and realistic path ahead.

It is crucial to view a college education as an investment. It is an investment of time, energy, resources, as well as a financial commitment. But how much of an investment you can or are willing to spend is an important factor in your decision. How do we determine this?

Your Career Path is Important in the College Planner Process

Considering your career path is part of the comprehensive college planning process.
Melissa Cox CFP® considers your potential career an important part of your comprehensive college funding plan.

We begin by identifying what career you want to pursue. As odd as it may sound, the first step in planning for college is to start at the end rather than the beginning.

Do you wish to teach? Are you interested in a career in business? Perhaps you are more science oriented? Are you considering graduate or professional school after college?

Looking ahead to your career path means we can project approximately your future income and ask whether your education should be financed through student loans. If your debt is large based on your future earnings, it can create a great deal of stress that proper planning can help you avoid or at least anticipate.

What does that mean exactly? If you intend to go into elementary education, the average annual salary in 2020 is currently $46,221.00; while that is great, how would you manage a student loan debt of $60,000.00 on that salary or lower? What if you plan on pursuing a career in accounting where the average annual salary in 2020 is currently $70,500.00 with that same amount of debt? Is that amount of debt easier with a higher earning potential? Certainly, your expected salary has to be a considered as we prepare you for college.

And what if you are unsure about your future career? Perhaps you want to attend college, but you are not certain about what type of job or career you want to pursue. With the assistance of your counselor, we can access your strengths and where your interests lie and in doing so, we will simultaneously review what school(s) may best fit you. As well as discussing potential majors, career paths, and work together to ensure that your family does not accrue a great deal of debt or financial stress going forward. It is okay to be unsure of your career or major, part of attending college is discovering yourself; however, that also requires planning.

Regardless of whether or not you have a major or a career in mind, you may still have different ideas from someone else who is pursuing the same degree. Yet, by planning ahead, you will enter college much more confidant and prepared to embrace the challenges ahead.

There Can Be Different Career Paths For Your Major

Each college major can provide different career options.

Here is an example of what I mean: let’s take three students who majored in biology. All three received some form of scholarships, but also had to take out loans to finance their educations. All went to the same university for their undergraduate degrees and they come from similar socioeconomic backgrounds.

One of the biology majors graduated with minimal debt. During her junior year, she realized that she wanted to attend law school. Her science background led her to focus on patent law. Knowing she was going to attend law school meant she kept her undergraduate debt level extremely low as law school would require substantial loans. She is currently a practicing attorney and she was able to pay off her debt due to her salary as a lawyer. Her family’s planning while she was an undergraduate prevented her from assuming too much debt.

The second biology major intended to go to medical school, but during her junior year she changed her mind. She began her job search in the summer before her senior year and found employment working as a pharmaceutical representative after graduation.  Because of her high salary coupled with a small amount of student loan debt, she purchased her first home at age twenty-three.

The third student earned her degree in biology and went to work for a major hospital as a research assistant. She enjoyed a wonderful working environment and eventually decided to return to school to pursue a graduate degree in a therapeutic field. She took a bit of time between her undergraduate degree and graduate school to plan ahead and pay off her student loans, fully realizing that she was going to accrue additional education debt in pursuit of her Master’s Degree.

Three students with the same degree, but with three different careers; yet all had a positive outcome in terms of both career satisfaction and their financial situation. Each had a plan and they were able to transition out of college and into their preferred career without having accrued crushing debt. Those that elected to pursue additional education approached it with a plan so their debt did not overwhelm them. Planning ahead really is the key.

Scholarships Also Require Planning in Advance

Scholarships are not automatic, and require planning.

But wait, you may say, what about scholarships? Will I qualify for grants? What about programs like the Public Service Loan Forgiveness Program?

The answers to those programs are a bit more complex. In 2020 the maximum income requirement to receive a Pell Grant is $30,000.00. There are state grants available, but they differ widely based not only on income, but also on where you are attending college. An in-state student who is enrolled in an in-state university may qualify for additional monies that are not available if they select an out of state college.

Scholarships are available, but they take a lot of planning and preparation. If you start looking for them in your senior year of high school, it is too late. There is a great deal of competition for scholarship money and identifying and submitting scholarship applications is an investment of time. Also realize that some scholarship money is a one-time deal; it is rare to find a scholarship that extends over multiple years of your education.

Plan Ahead To Qualify For Public Service Loan Forgiveness Program

Public Service Loan Forgiveness is available with advance planning
Melissa Cox CFP® includes Public Service Loan Forgiveness in Comprehensive College Planning

Finally, there are programs such as the Public Service Loan Forgiveness Program, but that also requires a bit of planning. For example, public school teachers in high need areas, certain types of government workers or people working in specific non-profit sector jobs can have some of their student loan debt forgiven if they work for a certain number of years after obtaining their degree. But this also requires planning because even with loan forgiveness programs, you need to carefully examine how much and what types of debt (if any) you may accrue.

A CERTIFIED FINANCIAL PLANNER™ Can Help Your Family Create a Comprehensive College Funding Plan.

A CERTIFIED FINANCIAL PLANNER™, like Melissa ox, can help create a customized plan for college.
Melissa Cox CFP® helps to create comprehensive college funding plans for college bound families.

Higher education is an investment for the student as well as the whole family. While I realize that this may seem overwhelming, I will work with your family to assist with not only the financial aspects, but the entire process. The most important thing to do is to begin early, creating a solid plan that will help you maximize on your investment while avoiding sacrificing your future.

Together, we can do this and I look forward to meeting with you to plan a better path ahead.

Give us a call and let's build a plan for your child's education.

Melissa Anne Cox CERTIFIED FINANCIAL PLANNER™ is also a College Funding and Student Loan Advisor, and Financial Coach in Dallas, Texas.

Schedule an Online Appointment with Melissa Cox CFP
Schedule an Appointment with Melissa Cox CERTIFIED FINANCIAL PLANNER™

Overwhelmed by student loan debt?