Saving Money for College – Is It Worth the Price?

her graduation dayThe day of reckoning is almost here for many college graduates of 2010.

If they haven’t already been hit with the harsh reality of the real world – it won’t be long before those with student loans are notified that there time is up.

There’s a 6-month post-graduation grace period for the Stafford loan, that’s probably the most common type of federal student loan, and it’s coming to a close.

Recent grads will have to start writing checks to lenders, and watch their bank accounts get a little smaller each month.

But there’s evidence that more teens who plan on seeking a higher education could do so with their own savings, and less of the government’s or mom and dad’s money.

According to TD Ameritrade, 66% of the teens it questioned for the 2010 Teens and Money Survey said they are saving their cash for college. That’s up from 62% in 2009. What’s more…only 46% of adults between the ages of 20 and 59 said they saved for college when they were teenagers.

The majority of adults questioned in the survey said – when they were in their teens – the things they saved for were clothing and accessories. Two-thirds of teens today say they’re saving all or at least part of the money they earn for continuing their education after high school.

The National Center for Education Statistics reported this year that the average cost of college tuition at a 4-year public school is close to $20,000 a year. It jumps to about $35,000 a year at a private non-profit 4-year school.

You’re going to have to find a pretty darn good summer job to save up enough money to pay for college on your own. But setting aside some money is probably a good idea. Young people may need to do whatever they can to offset the rising cost of college.

But could getting your BA be a bunch of B.S.?

79% of today’s teenagers think education is  important if they want to be successful. But that’s down from 84% in 2009.

Only 17% of teens in the TD Ameritrade study feel that the cost of tuition at big name schools like Harvard, Yale or Northwestern is really worth it when considering how it would help them get a job.

What we’ve always been told is that it’s the experience of going to such schools that makes it worthwhile. You’ll make connections, you’ll become cultured, but will you really learn the skills you need to survive in the workplace?

Some people choose to go to vocational schools, two-year or technical colleges instead of  more prestigious universities. This could be a smart move. During the recession – lots of so-called white-collar jobs were lost. So were many blue-collar manufacturing jobs. The question is – where will the jobs be after they graduate?

A job is pretty important once you have to starting writing checks for your student loans.

It’s a tough decision to make. I’m one of those kids who ended up going to a private four-year college instead of a state school. I’m pushing 30 and still whittling down that student loan debt. Was it worth it. That’s still to be determined I guess.

As I write two personal checks for student loans each month, there are definitely times when I think about how I could have gotten a very similar education at a state school, landed the same employment opportunities in life, and had a lot less debt. Or I could have attended a technical school or a special program that let me focus on specifically what I wanted to do. Or maybe I should have just interned and learned from experience.

Microsoft founder Bill Gates (do I really need to say anything besides just Bill Gates) has stated that he thinks the cost of college could be as low as $2,000 a year. Bill Gates believes the tuition price tag could come down if more post-secondary education was offered online.

But online schools aren’t always cheap either. The PBS show Frontline investigated schools like The University of Phoenix and found that it was basically a money making machine preying on people who had a tough time affording a more traditional college education. Watch College Inc. online

There are plenty of people who are highly critical of more a more traditional higher education as well. They  say 4-year universities are just as big of a rip off. Watch the 20/20 segment below for some interesting views on college in America.

I guess the bright side of expensive tuition is that more young people are learning to save money and budget. But is what they’re saving up for really worth it?

What’s your opinion – leave a comment and let us know! We’ll talk more about student loans and education this week.

By the way – want some free education? Discover what you can learn from the Check Education section at Check Advantage.  Stop by when you’re visiting the site to order personal or business checks.

Image Credit: harrykeely

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  1. College is important but I don’t know that the cost is equal to the gain… I’m in college so like you said remains to be seen.

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