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planning for college chart

One study by a Washington, D.C., think-tank concluded that the long-term benefits of a four-year college degree are equivalent to a financial instrument with a 15.2% average annual return. In calculating the cost/return, researchers included typical college tuition and fees plus the wages that students often forego while attending classes. Room and board were not considered because people must eat and sleep whether they are in school or not.

Fortunately, researchers found that college graduates often begin to recover the costs right away. At age 22, the average college graduate earns about 70% more than the average worker with only a high school diploma. And at age 50, a college graduate earns roughly $46,000 more per year than someone with only a high school diploma.

life_guide_paying_for_collegeOf course, the up-front cost of a four-year degree is substantial (calculated at $102,000 for this study), so families may want to start saving as early as possible to help their kids pay for college.

Planning for your child’s college education should not conflict with your retirement goals. Planning early will prevent anxiety and stress. Use my free life guide “Paying For College” to help you with your planning.

Source:  CNNMoney, June 30, 2011