Blog, Money

College is Coming! Have You Started Saving Yet?


How times change! In 1940, half of Americans finished their education in eighth grade. College degrees were relatively rare. Just 6 percent of men and 4 percent of women had one. (1)

During the past 80 years, college has become far more popular. As interest in higher education grew, America’s network of colleges and universities expanded. (2)

Despite the number of colleges and universities, demand has consistently driven education costs higher. In 1940, tuition at the University of Pennsylvania’s Wharton School set students back about $400 per year. Once room and board, books, and fees were added, costs rose to $985, which in today’s terms: you’re looking at a total of $16,900 when adjusted for inflation in 2016. (3, 4)

Is college worth it? 

To the dismay of many, college costs have risen far faster than inflation. In 2016, College Board reported the average cost for undergraduate tuition, fees, and room and board was about: (5)

• $11,580 for in-district public two-year colleges and universities

• $20,090 for in-state public four-year colleges and universities

• $35,370 for out-of-state public four-year colleges and universities

• $45,370 for private non-profit four-year colleges and universities

Of course, the amount students actually pay varies by institution. Ten percent of full-time students attend colleges or universities that charge less than $12,000 a year, and seven percent enroll in schools with tuition of $51,000 or more. (5)

Imagine having three or more children who are close in age and all want to attend college. Even parents with significant wealth may find it challenging to pay multiple tuitions in a single year. It’s not a surprise the potential cost of college is overwhelming for many parents, and it begs the question: Is the cost of college really worth it? 

The simple answer is yes. The Bureau of Labor Statistics reported, “Few things affect people’s earnings power more than their level of education. In general, more education means more dollars earned.” In 2014, income varied significantly by educational achievement. (6)

Americans with less than a high school education earned about $25,000 per year. Those with a high school education earned about $35,000 per year. Those with some college earned about $40,000 per year. And Americans with a bachelor’s degree or higher earned about $62,000 per year.

When you do the math, the difference in lifetime earnings for a person with a high school diploma and one with a bachelor’s degree is more than $1 million.

Of course, there are exceptions. People often point to the college dropout superstar tech CEOs, the hustling entrepreneurs, and the standout sales execs who worked their way up the corporate ladder without a degree. 

But the reality is, while these kinds of success stories are wonderful and inspirational examples, they don’t always tell the full story—startup capital, personal connections, a major stroke of luck, and extraordinary talent or abilities often accompany the hard work behind the scenes. 

Unless your child is going to go into a particular trade, which would also require an investment in some kind of training, the best way to set them up for success and a more secure career path often starts with a solid college education—ideally, without saddling them with too much student debt.

Take One Bite at a Time

In the 1970s, U.S. Army General Creighton W. Abrams said, “When eating an elephant, take one bite at a time.” It’s good advice anytime you confront a difficult task that seems insurmountable.  (7) When it comes to college, taking one bite at a time can include a varied approach.

Saving and Investing

As with any kind of saving or investing, the sooner you start, the better. Remember, compound interest is your friend, and investing in the market over the long-term historically has been smart for investors. Begin by setting aside a few dollars each week or month in a tax-advantaged account earmarked for tuition. Over time, you can watch the savings grow rather than scrambling at the last minute to cover college costs.

Summer Earnings

Allowing your child to get a summer job not only builds character but can also help to build their college fund. Sure, they can spend some of the money at the mall or wherever teenagers shop these days. But contributing some of a student’s summer earnings to a college account is a smart move and a lesson in financial responsibility.


Consider asking grandparents, relatives, and friends to give to the college fund at birthdays and holidays in lieu of gifts. You don’t have to drain the fun out of gift-giving, but that designer handbag or smartphone upgrade your tween is pining for could easily cover a credit or two in college. Add that up over a lifetime of birthdays and holidays, and these gifts can make a real impact.

Scholarships and Grants

Encourage your kid to find and apply for local and national scholarships and grants. If you do your research, you may be surprised at how many different kinds of scholarships and grants are available; they are not just reserved for a narrow few. Chances are, if you have a hard-working, talented, community-service oriented, or creative kid, they could be the right candidate. Check with your employer, the organizations you belong to, and community groups.

Apply for Aid

Learn how to complete the Free Application for Federal Student Aid (FAFSA) to qualify for grants, loans, and work-study. Many families are eligible for some form of support, even if you do not fall into a lower-income category. Students need to fill out this form if they will take out loans or get any form of aid from the school.

Find Ways to Save

Cut back on costs by looking for ways to earn college credits while still in high school. Advanced Placement (AP) classes and dual-enrollment can reduce the overall cost of college tuition and fees by thousands of dollars. 

Starting at a community college for core courses and then transferring to a four-year institution later can amount to considerable savings. 

You can even find interactive online courses offered for free or low-cost by some of the world’s best colleges and universities. Even if they can’t earn credits, these courses can supplement and support their learning, setting them up for greater success in their actual coursework.


Your student may also consider joining a military or community service program that helps pay for college. For example, ROTC, AmeriCorps, or Peace Corps could be the ticket to covering tuition costs while gaining a wealth of experience and personal fulfillment through service.  

Affordable Colleges

One of the most obvious but often-overlooked ways to make paying for college possible is to look for a more affordable school. You don’t have to send your kid to the most expensive school for them to get a good education or begin building a network in their field. Applying to less expensive colleges and universities can be a great value and a smart move. Consider looking into smaller private colleges and universities that may offer more aid to attract good students.

Bottom Line

There are a lot of ways to cover the costs of higher education. It’s not all about just having enough cash in the bank. Approach the challenge from various angles and chip away at it, one bite at a time. And you might be surprised that what once seemed like a monster of an insurmountable task is actually something you and your family can handle.


1 (Page 7)



4 Federal Reserve Bank of Minneapolis CPI Calculator app: (Click on App information) (or go to

5 (Page 9, Table 1A)




The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

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