Why the Middle Class Is Investing in Education Despite Skyrocketing Costs
For many families, access to higher education remains the foundation of the American dream, a way to help current generations surpass their parents and grandparents. Yet the cost of higher education has only increased over the years — dramatically so.
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When U.S. News and World Report assessed 20 years of tuition costs at national universities, the publication found that, when adjusted for inflation, tuition and fees at private national universities has increased by around 40%. Though out-of-state tuition and fees at public national universities ticked up about 38%, in-state tuition and fees at public national universities spiked by roughly 56%.
Still, many middle-class families are undeterred by the rising expenses of education. To understand why these families regard higher education as a high-value investment — and to offer insights about how to effectively think about saving for college — GOBankingRates put our thinking caps on and talked to some A+ experts.
Parents Are Thinking About Their Childrens’ Future
As a parenting expert, home educator and co-founder at Bright Sprouts, Meg Tibayan keeps her finger on the pulse of trends in children’s education and development. She has noticed a significant increase in middle class parents’ investment in education, heavily driven by a recognition that there’s still long-term value in earning a degree.
“Middle-class parents increasingly understand that investing in their children’s education is an investment in their future success and well-being,” she said. “This understanding has led many to prioritize educational expenses, even when it means making sacrifices in other areas of their budget.”
There’s plenty of outside data to back up her observations. In fact, the Association of Public & Land-Grant Universities reported that the median earnings for people with bachelor’s degrees is about $36,000 — 84% higher than it is for people with only high school diplomas.
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The Emphasis on Education Is Starting Earlier
While you might consider the brick-and-mortar K-12 schoolhouse as the traditional foundation toward a college degree, Tibayan has observed a rise in educational opportunities outside the standard schoolhouse.
From online courses to tutoring, extracurricular activities to specialized programs, there are many resources available to address a variety of children’s learning needs and areas of interest — allowing them to grow and mature as students early on. Better prepared learners stand a better chance at potentially being admitted to universities with names that could help position graduates to enter the workforce with higher earning power.
“Parents are eager to provide their children with these advantages,” Tibayan said, “recognizing that a well-rounded education can open doors to prestigious universities and lucrative careers.”
Planning Ahead Makes Dreams Reality
Sitting down at the kitchen table and budgeting for their kids’ college funds, many parents dream about more than just the moment their children walk across the stage, diploma in hand. They also imagine their kids finding the friends, colleagues and professors who can help make the connections that make a difference.
According to Erika Kullberg, personal finance expert and founder of Erika.com, “Education also plays a pivotal role in fostering social mobility, allowing individuals to transcend socioeconomic barriers and achieve personal and professional success.”
But parents should do more than simply hope that their kids will be in proximity to these influential figures. With some careful and early planning, parents can make sure their children can enter the hallowed halls of their preferred institutions.
“To plan for a child’s educational future, begin financial planning as early as possible by setting up a dedicated college savings account, such as a 529 plan or a custodial account,” Kullberg said. “Regular contributions over time can help accumulate substantial funds to cover tuition, fees and other educational expenses.”
As kids reach the age of college tours and SAT prep, parents also should start helping them research scholarships, grants and financial aid programs that can offset the cost of education. Families can use their children’s academic achievement and extracurricular activities to help steer their applications for various scholarships and financial aid opportunities.
However, some of the most important planning parents can do starts well before the pamphlets for various colleges arrive in the mail. Ensuring that children understand how finances work will better prepare them to plan for college even beyond making the grades.
“It is important to empower children with financial literacy skills from a young age, teaching them the significance of budgeting, saving and making informed financial decisions,” Kullberg said. “Engage in open and transparent discussions about the costs and responsibilities associated with higher education — and why it is important for their future.”
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This article originally appeared on GOBankingRates.com: Why the Middle Class Is Investing in Education Despite Skyrocketing Costs
