It Turns Out Saving Money for College Could be a Complete Waste

Posted in Financial News , Savings Account • January 28, 2013

cost of collegeIn years past, college-bound students have been assured that the cost of college is worth the potential for a high-paying career. While this belief was accurate decades ago, a newly released study by the Center for College Affordability and Productivity, a non-profit organization, reveals that more post-graduates are landing occupations that do not require a bachelor’s degree.

The findings of the study call into question whether adding savings account funds in the name of higher education is really worth it, or if those savings would be better put toward a home or retirement.

What a College Tuition Gets You

According to the study’s lead investigator and institution’s founder, Richard Vedder, underemployed college graduates who have coughed up the necessary college tuition to obtain a degree may be in the midst of a new norm: A higher percentage of young professionals accepting non-degree types of employment.

“There are going to be an awful lot of disappointed people because a lot of them are going to end up as janitors,” Vedder says.

The report, which bases its findings on 2010 data from the U.S. Census Bureau and  Labor Department data, reveals that the number of taxi drivers who held bachelor’s degrees rose to 15 percent, compared to 1 percent in the 1970s. Additionally, retail sales clerks, a position that is typically regarded as a part-time gig for graduation-bound students, has turned into a full-time profession; in 2010, 25 percent of sales clerks held a bachelor’s degree, up more than 20 percent compared to 1970.

One reason Vedder suggests for this occurrence is the fact that in 2010, college graduates entering the job market almost doubled the availability of college-degree jobs — 41.7 million to 28.6 million, respectively.

With such a dire job outlook for fresh college graduates, paying for the cost of college may be a fruitless financial move.

How to Manage the Cost of College

With college tuition skyrocketing, it’s important for high school-aged teens and younger adolescents planning for the cost of college to be mindful of the various ways to save money in pursuit of a degree.

Free federal aid still exists on as merit or need-based assistance, for those who submit their Free Application for Federal Student Aid (FAFSA) and who qualify for certain programs. In terms of cutting back on the cost of college, students have many options including:

  • Attending community college their first two years
  • Living at home
  • Pursuing a major in a high-demand field
Ultimately, however, not all post-graduate jobs are worth the cost of a pricey college tuition, such is the case with the ”bartender with a bachelor’s degree,” as the center describes.

(Image: pbinder)

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