THE ECONOMIC BLUEPRINT: When some is good and too much is bad: The cost of a child's higher education


"You know what would be heaven for me, Dad? A warm bath and a wine glass full of grape juice. Wouldn't that be heaven for anyone?" Oh, the things that come out of a 4-1/2 year-old's mouth.

So many thoughts raced through my head when my son said this to me recently. First, thank goodness he's drinking grape juice! Second, I better write this stuff down. And third, does my preschooler know more about wine than I do?

When it comes to wine, I know the difference between red and white. Full stop. I also know that every now and then there are news articles touting the benefits of drinking red wine. Like so many other things, a moderate amount of red wine can be a good thing, but too much is harmful. One of those other things, where some can be good and too much is bad, is student loan debt.

The costs and benefits of higher education

If I may, please allow me to briefly step onto my soapbox. With $1.6 TRILLION in outstanding student loan debt,1 I don't think anyone would deny that we have a higher education problem in this country.

Where I grew up, the goal after high school was to attend college. Nearly everyone went that path, without much critical thinking on the cost of tuition and what type of career opportunities it would create. But the cost of higher education appears to be increasing at an alarming rate, with one source reporting that the cost of a four-year degree doubled between 1989 and 2016, even after inflation.2

How is this sustainable? Nevertheless, higher education is still worthwhile for a significant portion of the population. How we help our children approach it, though, must change.

Strategizing for higher education like a public company

Public companies know that they can leverage themselves to grow. They issue corporate bonds and stock3 to the general public, which may allow them to attain further growth. The pursuit of higher education should be strategized in the same manner.

Consider this: the average salary for someone with a high school diploma is $35,250.4 By comparison, the average salary with a bachelor's degree is approximately $59,000.5 However, this comes at a cost: the average student loan debt for four-year college graduates is approximately $28,650.6

Further breaking this down, a high school diploma is worth $35,250 from age 18 until 65, totaling $1,656,750. A bachelor's degree is worth $59,000 from age 22 until 65, totaling $2,537,000. For the price tag of $28,650, one can earn $880,250 more over their lifetime, or over 50% more!

Now, if the college graduate hypothetically amortized their student loan over their entire career at 6% interest, they'd pay approximately $1,860 per year, to make $880,250 more. That's 7.9% growth for that period of time. Who wouldn't make that kind of investment?

Thinking critically about higher education

The statistics cited herein are general in nature. When preparing for the cost of higher education with children, it is crucial to be specific with regard to the cost of their specific degree and the potential for resulting lifetime earnings.

Of course we want our children to follow their dreams, but at what cost? As the price of higher education continues to increase, we may need to have challenging conversations with our children. Your trusted financial advisor should be there to help.



1Teddy Nykiel, Nerdwallet, 2019 Student Loan Debt Statistics, student-loan-debt/, Sep. 20, 2019.

2Camilo Maldonado, Forbes, Price of College Increasing Almost 8 Times Faster Than Wages, sites/camilomaldonado/2018/07/24/price-of-college-increasing-almost-8-times-faster-than-wages/#3b3226b466c1, Jul. 24, 2018.

3Stocks are equity and not debt, but for the purposes of this column it serves the function of utilizing leverage.

4Amelia Josephson, Smart Asset, The Average Salary by Education Level, https://smartas, May 15, 2018.

5Id. Keep in mind that the purpose of these statistics is an academic demonstration of using debt and leverage. The accuracy of this economic data is not guaranteed, nor is the accuracy critical to this demonstration.

6Paul Fain, Inside Higher Ed, Average Loan Debt for Graduates of Four-Year Colleges,, Sep. 20, 2018.
Attorney Kyle Zwiren works with Financial Architects Inc., an independently-owned company located in Farmington Hills. Zwiren and his team serve attorneys and other professionals to help them design financial plans in line with their goals and based on optimal efficiency. He practiced law prior to becoming a Financial Architect and left the practice to follow his passion. To talk to Zwiren about other topics featured in The Economic Blueprint, email him at or call him at 248-482-3622.

Published: Fri, Dec 20, 2019