College Degree Could Cost $500,000 in 18 Years

College Degree Could Cost $500,000 in 18 Years

In 18 years, a college degree could cost about $500,000 according to an article in BuzzFeed.

“People worried about college affordability today can at least take this to heart: it could get much, much worse.

Tuition has been rising by about 6% annually, according to investment management company Vanguard. At this rate, when babies born today are turning 18, a year of higher education at a private school — including tuition, fees, and room and board — will cost more than $120,000, Vanguard said. Public colleges could average out to $54,000 a year.

That means without financial aid, the sticker price of a four-year college degree for children born today could reach half a million dollars at private schools, and a quarter million at public ones. That’s for a family with one kid; those with more could be facing a bill that reaches seven figures.”

How much does college cost per year in the future?

College Degree Could Cost 0,000 in 18 Years
Source: Source: The College Board, “Trends in College Pricing,” 2014 from Vanguard

With the price tag of $500,000 for a college education, it might make sense to invest the money into a moderately aggressive portfolio at the age of 18 that makes you extremely wealthy by retirement age. Why waste half a million on a college education that may or may not get you a job. At this rate, college tuition cannot continue to increase forever. In another words, 4% real increases in college costs cannot continue indefinitely.

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