The gap between the rich and poor is growing rapidly across the United States. The richest 20% of US households receive a greater share of national income than the middle three-fifths combined. The bottom 40% are worse off in inflation-adjusted terms than similarly situated people two decades earlier.
Earnings of full-time workers who have a college degree continue to accelerate faster than those with just a high school diploma. The average college graduate earns 89% more a year on average than a worker with only a high school diploma. Each year of formal schooling after high school adds 5% to 15% to annual earnings later in life.
Today, the minimum per year cost for a student attending a 4-year, in-state university is about $20,000 per year. This cost includes in -state tuition, books, and room and board. It now takes an average of 5 years to graduate. Only about 40% graduate in 4 years. Here are the minimum costs of a college education based on 5 years to graduate and college costs rising at 5% per year. Now: $100,000 Future 5 Years: $127,628 Future 10 Years: $162,889 Future 15 Years: $207,892
1. Pay college costs out of ordinary income. Add 25% to 30% to cost for taxes. 2. Student works to pay part of costs. This could take longer to graduate with the higher possibility that the student will dropout. 3. Student loans. College graduate starts out in life deeply in debt. 4. Pay college costs out of assets. Buv a rental property that will be free and clear.
*$60,000 **$60,000
*$199,429 **$388,097
*S121,063 **$203,947
*$300,000 **$623,678
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