Whatchya doin?

Oh, I'm just nailing my most valuable possession to the wall.

Jazzy Bear!

No, not the dog.

My college diploma.

Oh, right.

Yep.

This little piece of paper cost me about $320 per square inch.

Wow.

That's almost as much as a Manhattan apartment.

It does make you wonder...

I mean, would I be happier if I chose another major?

Or gone to trade school instead?

At least you'd know you can't hammer a screw into the wall.

Huh.

I just thought it was fancy nail.

It's not exactly a news flash that college is expensive.

Graduates our age have an average of $37,172 in student loan debt--and they have to start thinking about their own kids' college.

If Philip and I had a baby this year, at around 4% inflation per year, in-state tuition would run us about $162,000.

There isn't ONE explanation why tuitions are inflating like a microwaved peep.

But there are some strong theories.

Supply and demand.

Over the last 40 years, having an undergraduate degree went from being considered an option to a necessity,

and the MORE people want something, the more the people selling it can charge.

Another theory puts the blame on student loans.

Wait..how does that make sense?

Well, they're scary easy to get.

Colleges have no incentive to control costs because they know the federal government and other loan agencies will keep fronting the money.

And finally, administration costs have ballooned as much as 60% in the last 25 years.

A lot of that gets blamed on perks that colleges are adding to attract customers--I mean, students.

Davidson College offers free laundry service.

Michigan Tech has an on-campus ski resort!

Of course, education is about more than just dollars and cents, but there's no denying

college is a financial investment.

You're paying all this money now in the hopes that you'll be able to make it back later.

So… will you?

For most people, yes.

The question is how long it will take, and that depends on your degree.

So which majors pay for themselves the fastest?

Let's RUN THE NUMBERS!

We'll start with the median income for somebody with only a high-school diploma.

Compare that to a college graduate with, say, a Communications degree.

That's an extra $15,000 per year!

Not bad, but how much did it cost?

The average cost of tuition, room, and board at an in-state university is $80,360.

So our Communications major will break-even on their investment in about 5.3 years.

A Psychology Major will take 11 years to break even,

an Arts Major will take 8.8 Years, the most popular major, Business,

will break even in 3.2, and the most lucrative undergraduate major of all, Engineering, will pay for itself in just 2 years!

Okay, but what about graduate school?

While it's true that some postgraduate degrees can push your income into the next tax bracket, these percentages don't tell the whole story.

Take law school.

The average law student graduates with somewhere between $85,000 and $125,000 in extra debt on top of their undergraduate loans.

While the top students at the most prestigious universities can pull down big bucks right away, they're in the minority.

Almost half of law grads earn a median starting salary of only $65,000 a year.

That's just a $15,000 pay bump for an extra $100,000 of debt.

Okay, how about med school?

That's gotta pay off big time, right?

Well, the median salary for a general practitioner is $175,000 a year, but the average cost of medical school at a public university is around $200,000.

When you factor in your undergraduate loans, and the interest that debt is racking up while you're in residency, it's very common for doctors to end up paying almost half a million dollars for 25 years for those two letters behind their name.

If all this is sounding scary or discouraging, just remember that statistically, it does pay to go to college in the long run, whatever your major.

And there are things you can do early on that will ease the debt burden down the road.

SHOP AROUND.

Most universities can supply you with information about how much their alumni make in the workforce.

They might even connect you with graduates of your same major who can answer your specific questions.

And when comparing prices, make sure you factor in the cost of living.

Some cities are so expensive to live in it can double the amount you'll have to borrow.

Consider community college.

There's a stigma that it's only for people who can't get into "real" college, but it's actually a pretty smart decision.

You can slash your undergraduate debt in half, and not get locked into a lifelong financial commitment at the wise old age of 18.

That's what Philip did, and today we have the exact same diploma from the same university, but mine cost more than twice as much.

And lastly, look into alternative financing.

There are companies and colleges that are trying out a new-fangled approach called Income Share Agreements in which the student agrees to pay a fixed percentage of their salary for a fixed period of time.

Unlike a loan which relentlessly accrues interest through good times and bad, ISA's don't punish the borrower for making less money than they hoped.

They're basically betting on you to do well, and sharing some of the risk if you don't.

Now, most people don't choose their major for purely economic reasons.

People wanna do what they love and what they're good at, and no Powerpoint presentation is gonna change their minds.

And there are benefits to college that you can't quantify, like broadening your horizons, or meeting your future husband.

Being money smart doesn't mean basing your life around money.

It just means taking simple precautions early on so you can chase your dreams without weights around your ankles.

And that's our two cents.