Profiting from College: Tips to Avoid Moving Back in With Mom and Dad

College Boomerang generation
College Boomerang generation

According to a recent report by Pew Research economist Richard Fry, 45 percent of recent college grads were living with their parents in 2011. While not nearly as high as the 85 percent figure cited by some news sources, this still represents a disturbing 13 percentage point jump over the number of boomerang grads in 2001.

It's not hard to see why so many young adults are moving back home: Unemployment is high, wages are low, and many recent grads are having a hard time finding any jobs, much less work that pays well and uses their recently-acquired skills. According to a study released last month, 48 percent of recent grads are doing work that doesn't require a college degree, and 38 percent have jobs that don't actually require a high school diploma.

For students hoping to graduate into a real job -- and a real apartment -- the question becomes how to get the biggest return on a college education while incurring the smallest possible debt. This is serious conundrum: For the 2010-2011 school year, the average tuition and fees charged to an in-state student to attend a four-year public college or university was $12,967 -- 60 percent more than it was 10 years ago, and almost three times as much as it was in the early 1990s. Factor in the cost of room and board -- which has risen more slowly -- and total average college costs are still about 60 percent higher than they were in 1991.

To cover these hefty bills, the average undergrad borrower ends up with approximately $26,600 in student debt. As an ever-growing percentage of students take on loans, the problem has reached epic proportions: In 2010, the total amount of student loans outstanding surpassed the total amount of U.S. credit card debt for the first time.

Here's a video that offers a few tips for saving on college. Some of the figures have changed slightly since it was made, but the advice still holds:

Saving on Tuition

The obvious first step toward graduating with less debt lies in paying less money to your school. Luckily, there are many ways to cut costs. One smart path is to start off at a community college. Since many universities accept up to 60 units of transfer credits, it's possible to spend your freshman and sophomore years at a two-year school, then finish up and get your sheepskin from a more expensive and prestigious institution.

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The numbers are pretty clear: In 2010-2011, two years of tuition and fees at a four-year college averaged $25,934, plus $18,250 for room and board. At a community college, students paid an average of $6,190 total for the same two years. Additionally, given that most community college students live at home, room and board costs can be negligible. Overall average savings: between $19,744 and $37,994.

As for the junior and senior years, prices vary greatly depending upon which school you chose, but public colleges and universities tend to be a wise bet. Tuitions at state schools are rising, but are still far lower than those of private institutions. The tuition and fees at a four-year public school averaged $7,136, compared to $26,523 at a nonprofit private four-year school. At those rates, students who opt for a public university would save $38,774 over two years.

Saving After Graduation

Saving on tuition won't help all that much if your degree doesn't get you a job. This isn't much of a problem for engineering majors: Six of the 10 most lucrative majors are in engineering, and three of the other four -- computer science, finance, and construction science -- are also highly math-dependent. Students with degrees in these majors can look forward to average starting salaries of $63,070.

Even if you're more inclined to the liberal arts, all hope is not lost: Graduates from less in-demand majors can still expect to vastly out-earn workers with only a high school diploma. English majors, for example, make an average of $1.92 million over a 40-year work life, as do philosophy majors. What's more, according to the Princeton Review, majors like psychology, business administration and communications can prepare students for a variety of careers in a host of industries.

Another thing that can give students a step up is a solid career placement program. While many of the top placement offices are at private schools, some public schools also have great programs. According to the Princeton Review, the University of Florida, Penn State, UT-Austin, Clemson, and Missouri S&T are particularly outstanding.

Internships can also be a big help: A 2012 survey by the National Association of Colleges and Employers revealed that 58.6 percent of students who completed an internship with a company were offered a full-time job. They were also likely to be paid more: The average starting salary of graduates with at least one internship was 31 percent higher than those who had never undertaken one. In other words, when it comes to getting a job after college, the best move might be to get a job while in college.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at, or follow him on Twitter at @bruce1971.

Photo Credit: Alamy