Costs and Benefits

Is college worth it?

As millions graduate and face a sub-par job market, many are looking at their degree and their bills for student loans and wonder whether it all the time and effort and money are going to pay off.

There’s now a web site that tries to quantify this return on educational investment by school. The methodology of the return number is deeply flawed—it depends on self-reported surveys and eliminates anyone who later earns a graduate degree—but at least it’s a start. For the past several decades college costs have been released from the bonds of economic gravity—which is why now only about half of Americans see college as affordable.

Most of the information in the survey is fairly common-sense: top colleges cost more but return more; excessive costs lead to a lower ROI; low-rated colleges are less expensive, but often don’t enhance earnings all that much; and engineering -focused schools tend to have higher returns. But there are some surprises as well: a highly-rated four-year private school with tuition under $10 thousand per year; or many public universities that offer double-digit returns—to both in-state and out-of-state residents.

Cardinal Newman once wrote that you go to college to save your soul and enlarge your mind. But with prices so high, you’d be foolish not to look at the financial consequences as well.

Douglas R. Tengdin, CFA

Chief Investment Officer

By |2013-05-30T08:38:30+00:00May 30th, 2013|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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