If you think college expenses and tuition are meteorically expensive right now, you’ll likely cry when you read the estimations of what it might be in 2036. The most pertinent question to ask, however, is “Are these predictions credible?” Some say “Yes,” while others say “No.” Only time will tell, and, until that time comes, we can only decide for ourselves which predictions we believe. For now, it could go either way.
2036, according to Wealthfront
According to the study, “In 2036, 18 years from now, four years at a private university will be around $303,000 up from $167,000 today.” What is more, “to get a degree at a public university, you’ll need about $184,000 in 2036, compared with $101,000 now.”
Who says so?
Wealthfront is an automated investment platform that offers college savings options. It is also the author of these estimations in future college tuition and expenses. Wealthfront used Department of Education data, in conjunction with the expected annual inflation, to construct these projections for the year 2036.
Here are a few of the numbers that Wealthfront came up with vis à vis specific college tuition prices:
|University of California Los Angeles||$221,000||$394,000|
|University of California Berkeley||$224,000||$399,000|
|The University of Texas at Austin||$211,000||$377,000|
So what do I do?
Many experts say that 529 plans, which are tax-advantaged investment funds that can be used toward your child’s education costs, would be a great option for those nervous about the future in college pricing. And, as always, the sooner you start saving, the better.
“If you start saving at your child’s birth, about a third of the college savings goal will come from those earnings,” said Mark Kantrowitz, a student loan expert. “If you wait until the child enters high school, less than 10 percent will come from earnings, and you will have to save six times as much per month to reach the same goal.”
Your first step in deciding what kind of 529 plan you want, because there are a few, is to figure out if your home state offers a partial or a full state income tax deduction for your contribution. More than half of states do offer this deduction.
Beyond taxes, it might be a good idea to compare plans by their investment options and fees. Also, oftentimes funds will offer age-based plans, which are plans wherein the fees become less weighty as your child approaches college-age.
You can get a breakdown of 529 plans at SavingForCollege.com.
Hold up – Are these projections even accurate?
The national student debt has reached $1.7 trillion, and it continues to grow. But many believe that the educational tuition and expenses are an economic bubble just waiting to burst.
As soon as we get away from the idea that the more a college costs, the better it is and the sooner the bubble will burst. This is especially the case with the prevalent habit of tracking college worth — not by graduate rates or job employability post-college — but by arbitrary prestige and price of admission.
For most families, a student off to college is not a guarantee for a high-paying job, the ability to afford a home, a new car or any of that. It is, however, most often a guarantee of future debt. The reason for these myths about a direct relationship between high-priced colleges and high-paying jobs is due to pure misinformation.
Some changes we can make
Why sit in a classroom – or Zoom class – when the same course is taught at half the price at your local community college? The answer comes down to prestige. And as soon as America smartens up, the sooner we can do something about the soaring college prices. And the sooner the bubble will burst.
Making higher education more localized is one way to expedite the bursting of the university bubble. Online courses are also a way to start up the process, although the stigma often prevents many from enrolling. Lower-cost satellite campuses are another viable option to try and wrest power away from the high-cost universities.
While some believe that the tuition and expenses required to attend university will continue to rise and rise, others think differently. The latter asserts that, with a little bit of brainpower and the sloughing off of stigma and stereotyping about the “lower prestige options,” America can force the university economic bubble to burst and usher in a new era of decreasing costs for students. Those institutions with over-hyped reputations and exorbitant prices need to be challenged by the market. Their prices need to be justified against real-life job employability (a challenge they will not live up to). If we no longer accept tuition hikes and admission fees that are mismatched concerning what value they offer, the market will see a decline in university tuition prices, as well as expenses. We can only hope!
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