Photo: Flickr via bgreenlee
Citing rising tuition costs and a poor job market, 20 per cent of middle class parents say they don’t consider a college education to be a worthy investment.The finding was cited in the latest Merill Edge Report, a semi-annual survey that looks at financial concerns among American adults earning $50,000 to $250,000 per year.
“Parents continue to financially support their children’s education, yet 40 per cent of the [middle class] express concern over the rising cost of college,” the report says.
It’s no wonder they’re worried. More than half of middle class families plan on dipping into their own savings to fund their childrens’ college education, and an increasing number of parents have found their finances tangled up in the ongoing student loan crisis.
Of course, much of college graduates’ success depends on what area of study they pursue.
“The return on the college investment is driven by the institution a student attends, the degree they earn, and their field of study,” Mark Schneider of the American Institute for Research told BI. “As college has become a mass product, there are a lot more students attending schools with lower [returns on investment].”
The five lowest-paying majors are nearly all in the social service sector, while computer sciences and engineering programs continue to churn out high-paid workers. A recent PayScale study listed the median mid-career pay for a Petroleum Engineering major at $163,000 and the median mid career pay for a Social Work major at just $45,300.
Of the 1,000+ parents polled by Merrill Edge, just over one-third plan on relying on scholarships and grants and about one-in-four will ask their kids to chip in. Yet again, one of the simplest ways to save for college is still vastly underused –– just 20 per cent of families take advantage of education savings plans, according to the report.
And they’re not exactly learning from their mistakes.
“Half of [middle class] parents with children who did, or will, attend college, wish they had started saving for their first child’s education earlier,” the report says. “However, only one-third (32 per cent) of this group are actually saving differently for their second child’s education than they did for their first.”
While the value of college education will likely remain hotly debated –– why send your kid to law school if they face a 40 per cent unemployment rate? –– there’s no underestimating the value of saving as early as possible.
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