How to Go to College Without Going Broke (and Yes, You Still Should)

Between rising tuition and a stagnant job market, some pundits have argued that higher education isn't worth the money anymore. But surveys show that college graduates on average earn more than twice as much as workers with only a high school diploma. So how can you get a college education without spending the rest of your life in debt?

For the 2009-2010 school year, the average cost of tuition and fees at a four-year college or university was $12,467 -- 60% more than it was 10 years ago, and almost three times as much as it was in the early 1990s. Factor in the cost of room and board -- which has risen more slowly -- and total average college costs are still about 60% higher than they were in 1991.

To cover these hefty bills, the average undergrad takes out loans, and graduates with approximately $25,250 in student debt. As an ever-higher percentage of students take on loans, the problem has reached epic proportions: In 2010, the total amount of student loans outstanding surpassed the total amount of credit card debt for the first time. This year, it is on track to cross the $1 trillion barrier.

Worth the Money?

So is a college degree is actually worth the price? James Altucher, a finance writer and hedge fund analyst, has made headlines with his claim that people of college age would be better served by taking those four years to start businesses, travel the world, and generally discover themselves. Peter Thiel, co-founder of PayPal, agrees, and has put a bit of his money where his mouth is: The Thiel Fellowship is giving a small number of young people grants of up to $100,000 that they will use to start businesses. The only catch is that they have to agree to stay out of college for two years.

Thiel and Altucher aside, however, the truth is that, for most young people, a college degree has become more necessary -- and valuable -- than ever. According to a recent Pew survey, the average lifetime earnings for a college graduate are $1.42 million, almost double the $770,000 of a worker with only a high school diploma. Even given the cost of tuition and the loss of earnings during one's college years -- which Pew estimates at $100,000 overall -- a bachelor's degree is still very profitable.

Saving on Tuition

In the short run, college is extremely expensive, but there are many ways to cut the costs. One smart move is to start off at a community college. Since many universities accept up to 60 units of transfer credits, it's possible to take your freshman and sophomore years at a two-year school, then finish up and get your sheepskin at a more expensive and prestigious institution.

The numbers are pretty clear: Based on the 2009-2010 figures, two years of tuition and fees at a four-year college average $24,934, plus an added $17,038 for room and board. At a community college, those students can expect to pay an average of $5,426 for the same two years. Additionally, given that most community college students commute from home, room and board costs may be negligible. Overall savings: between $19,508 and $36,546.

As for the junior and senior years, prices vary greatly depending upon the school, but public colleges and universities tend to be a wise bet. Tuitions at state schools are rising -- they went up more than 8% over the last year -- but are still far cheaper than private institutions. The tuition and fees at a four-year public school averaged $6,695, compared to $25,552 at a nonprofit private four-year school. At those rates, students who opt for a public university would save $37,714 over two years.

Saving After Graduation

Saving on tuition won't help all that much if your degree doesn't get you a job. This isn't much of a problem for engineering majors: Seven of the 10 most lucrative majors are in engineering, and the other three -- physics, computer science, and applied mathematics -- are also highly math-dependent. Students with degrees in these majors can look forward to average starting salaries of $63,070.

Even if you're more inclined to the liberal arts, all hope is not lost: Graduates in less in-demand majors can still expect to vastly out-earn workers with only a high school diploma. English majors, for example, make an average of $1.92 million over a 40-year work life, as do philosophy majors. What's more, according to the Princeton Review, majors like psychology, business administration and communications can prepare students for a variety of careers in a host of industries.

Another thing that can give students a step up is a solid career placement program. While many of the top placement offices are at private schools, some public schools also have great programs. According to the Princeton Review, the University of Florida, Penn State, UT-Austin, Clemson, and Missouri S&T are particularly outstanding.

Internships can also be a big help: A 2010 survey by the National Association of Colleges and Employers revealed that students who had completed at least one internship while in college were almost 38% more likely to get a job offer after graduation. They were also likely to be paid more: The average starting salary of graduates with at least one internship was 31% higher than those who had never undertaken one. In other words, when it comes to getting a job after college, the best move might be to get a job while in college.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at, or follow him on Twitter at @bruce1971.

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i accept your point education in college is extremely expensive.... Top colleges and universities are listed in this website

December 20 2011 at 2:16 AM Report abuse rate up rate down Reply


December 20 2011 at 1:55 AM Report abuse rate up rate down Reply

These figures have to wrong. A h.s. grad makes only $770 k and a college grad only $1.42 million. That is less than $20 K for the high school grad and about $35 K for the college grad annually.

I would reject this article.

November 30 2011 at 11:28 PM Report abuse rate up rate down Reply
damned gentlemen

The GOP called to say, "Stop undermining our plans to make Americans so stupid that they'll vote for us!"
They are the ones putting out propaganda saying, "Oh, maybe you should skip's just elitists and scientists anyway..."

November 11 2011 at 12:52 PM Report abuse rate up rate down Reply

This article is the same advice as every other article on the topic gives. And it's bad advice. Does the author think today's students aren't already doing that? Heck, it was the same advice given 20 years ago when I was a student.

There's really a much simpler bit of advice that is more realistic for today's world. Yes, getting a degree helps with long-term earnings and is worth getting, but why is everyone insisting it must be obtained in 4 years? Trying to work 2 jobs, take crappy community college courses, and pull down a full-time load with lousy grades because you have no time to study between working and commuting and hunting for parking is not going to help you be one of those people with gainful employment when you graduate. Go to school part time and work full time. Take only as many credits in a semester as you can afford and as your work responsibilities leave time to study for. It might take you longer, but you're showing a future employer that you have work experience when you graduate, can balance work and other responsibilities, and don't have to pay off loans for years. It's sure better than taking a few years off to travel Europe (How out of touch with reality is the person who suggested that? If you can't afford college, how do you afford traveling?)

Things like internships are a good idea, but the good ones of those are already competitive, so not everyone gets one. Simply put, the top students get the internships and are more likely to get employed when they graduate...with or without the internship. So, don't settle for mediocrity. It's better to take 6-8 years to finish college with high marks and low debt than 4 years with low marks and high debt.

November 10 2011 at 8:41 PM Report abuse rate up rate down Reply

I believe he is confusing correlation with causation. Is it possible that the type of people that go to college have the intelligence necessary to earn higher wages. So:
intelligence = attending college, earning potential
attending college = earning potential

The decision to go to college should be based on what you value you think you can bring to the marketplace, and what sort of education is required to provide that value.

November 10 2011 at 1:45 PM Report abuse rate up rate down Reply

I wish this was as easy as the article says. I'm 24 almost 25 with very little college education. I want college more than anything! But my family cannot afford it - my parents are extremely sick (always have been) and I take care of them with every penny I earn from retail and food service.

November 09 2011 at 3:28 AM Report abuse rate up rate down Reply

As a single parent I was only able to save around $15.000 toward my sons education. When the time came he graduated early from high school went to a junior college (got a grant or two) and after 2 years transferred to a state university ,he carried full units to graduate in his chosen field in 2 years. He worked 20 to 30 hours per week and between us we made it work. He wanted the experience of living on campus. I gave him leave to do this but cautioned him on funds, when he figured out how much of the money was going toward "bedspace" (the size of a broom closet ) and all the noise he decided for himself that it wasn't a good place to get work done. We were fortunate to have the university he wanted to attend (which had an outstanding film dept) within our radius and he decided to commute. After the 2yrs junior college and 2 years university he graduated with a BA in film. He became a music film supervisor at Universal 3 years after graduation. We walked away debt free. Just a suggestions for students who find they need to work during college, look for work with law firms. You pretty much do "grunt" stuff, filing, shredding, archiving, phones and errands but they are the most accommodating employers you can find. They have a real appreciation for the student and the importance of their access to education. They are flexible to your school scheduling needs. Along with a pay check they provide a perfect market place experience where you will learn workplace etiquette ready for your future challenges.

November 08 2011 at 7:21 PM Report abuse rate up rate down Reply

As if I'd believe anything that dork said...

November 08 2011 at 7:04 PM Report abuse rate up rate down Reply

Many young adults (many home educated and from families of very modest means) use a program provided by CollegePlus! . Earning FULLY ACCREDITED degrees in 2 years or LESS for $10k-$15k.

It is based on a book by Brad Voeller - Accelerated Distance Learning - The New Way to Earn Your College Degree in the 21st Centry.

I promise this is not some gimmick or degree by mail scam. They currently
have 2,000 student enrolled. My daughter (home educated) is sill finishing her high school earning dual credit attending the local Jr. College and is CLEP'ing (see ) many of the required liberal arts (sociology, english comp., Analyzing and Interpreting literature, etc..) and is planning to enter Nursing School in Fall of 2012. She did an on-line English Comp (I and II) this summer.

All this isn't some magic that CP! has invented, it's just a non-traditional approach that anyone can do. What CP! does is keeps you from all the fits and starts with trying to figure it out on your own (it does take a work/effort) and then provides an accountability coach that keeps you on plan.

The govt. system is broken and we've been brainwashed into thinking the only option is 4-5 years $50-100k on some brick and mortar campus. If your hearts desire is to take that amount of time, live on a campus and spend that much money, then CollegePlus! may not work for you. But why not save 2 years and 1000's of $$ and put that toward a Masters or MBA (more and more the norm) ??

This is not a gimmick. Check it out and you'll be Amazed.

November 08 2011 at 5:27 PM Report abuse -1 rate up rate down Reply