This used to be a fairly easy to answer question. You could find the college’s sticker price, the student pursued a bunch of scholarships before they started college, and the remaining was largely within reach for Mom and Dad to pay out of pocket; or, if the student worked hard, for the student to cash flow. As a parent of a college-bound student, who attended college yourself and therefore has a preconceived notion of what you should be expecting, you can learn more about how the college funding process has changed in my last post.

As I noted, the cost of college has grown tremendously. More than twice the rate of inflation, on average, since 1985. The natural question is, of course, why? There are a number of underlying issues.

First, is that the rise of student loans have made the cost of college appear to be within reach of more and more families. Think of the current college class’s grandparents or great-grandparents generation – the only people who went to college were the rare true professionals who needed a college education. Only 3% of the adult population had a post-secondary degree in 1910 in the US. Instead, secretaries went to secretarial school, 1 year in which they learned skills they needed specific for being a secretary; compared to today’s administrative assistants who often have had 4 years of college that prepared their classmate equally well who went to work as a shift manager at McDonald’s. Trade schools were commonplace.

Second, college used to be an unglamorous affair. Dorms were dark little boxes, into which squeezed two to four students with minimal possessions. Many students did not have cars. Gyms were sweaty stinky places primarily for athletes, not the whole student body.

Third, students focused on finishing their academics and getting into the job market. Fewer students went on to post-baccalaureate degrees. From 2000 to 2018, we went from 8.6% having an advanced degree, to 13.1%. Pre-2000, there were even lower rates, especially among women (see the first figure). Now more students are working, and working longer hours, presumably at the minimum wage jobs commonly available to college students, than they had historically back to 1970. This may be contributing to the rise in students taking longer to finish their traditionally 4 year baccalaureate degrees, leading to 5th and 6th year seniors, which is a financially losing proposition compared to finishing in 4 years and moving on to the pay and benefits commensurate with the college degree. Double majors also often take longer to complete, are now between 10-40% of the student body, and only result in an average of a 2% increase in pay.

And finally, it’s important to finish what you start. If your student leaves college without the degree, a job in their intended field may be out of reach, leaving them only with the college loans and no commensurate pay. While many parents say “I just want my child to go to college”, what they typically mean is “I just want my child to finish college and get an appropriate job.” Thankfully, this is an area in which improvements have been made 1, 2.

All of this to say, the most important ways to control your college costs are to:

• be selective about what level of college amenities you’re paying for, including both the amenities your student brings with you such as a car, as well as the on-campus amenities such as a brand new deluxe gym,
• pay for a degree that aligns with your student’s job goals at a college that has a reasonable return on investment in that field,
• get done with The College Experience, with a degree, in the shortest amount of time feasible.

I encourage you to have a discussion today with your college-bound student, setting your expectations up front, and outlining the consequences of any failure on their part to align with these expectations. With motivations like “we’ll help you pay for years 1-4 at XYZ college, but you’re on your own for all the time after 4 years”, students may stay more focused, pay attention to sequences availability, and make sure to get prerequisite courses in on-schedule.