College is still worth it, despite rising costs

May 01, 2015

According to a recent survey by Discover Student Loans,* 81 percent of adults with college-aged children feel that college is very important to their child's future. And this isn't just their opinion. Data show that a college degree leads to a higher salary and less unemployment. While costs may be rising, thinking about finances now can help prepare you for what's ahead.

Education pays

The financial benefits of an education are staggering. Those with a college degree stand to make $20,000 more per year on average than someone with only a high school diploma. This is especially true for women, whose employment numbers and income jump significantly with each degree earned.

Roll over charts for more information.

Created with Highcharts 4.1.5Percent EmployedMedian EarningsPercent EmployedMedian EarningsLess than HSdiplomaLess than HS diplomaHS gradsSome collegeBachelorsdegree orhigherBachelors degree or higherGrad or prof.degreeGrad or prof. degree0%10%20%30%40%50%60%70%80%0K10K20K30K40K50K60K69.9K80K

44% of parents are more likely to fund their child's education if the child majors in a field that has a higher likelihood of employment.

—Discover Student Loans 2015 survey

Costs on the rise

College tuition rates have soared, largely due to state funding cuts. This and other factors may contribute to why only 9 percent of parents say they can afford all of their child's education, according to the Discover Student Loans survey. But even with tuition increases of up to 66 percent over 10 years, there are still affordable options.

Annual Tuition

Highest Annual Average Tuition

  • New Hampshire$14,712
  • Vermont$14,419
  • Pennsylvania$13,246
  • New Jersey$13,002
  • Illinois$12,770

Lowest Annual Average Tuition

  • Wyoming$4,646
  • Alaska$6,138
  • Utah$6,177
  • New Mexico$6,190
  • Montana$6,279

Tuition Percentage Increase

Lowest tuition increase
over 10 years

  • Ohio18%
  • Maryland22%
  • Montana28%
  • Missouri29%
  • Wyoming30%

Highest tuition increase
over 10 years

  • District of Columbia66%
  • Hawaii65%
  • Arizona61%
  • Colorado61%
  • Georgia58%
Source: College Board's Tuition and Fees by Sector and State

Maximize earning potential

Parents and students are trying to offset college costs by looking at future employment opportunities. Some majors are more likely to lead to better paying jobs. According to the Discover Student Loans survey, the number of parents who say they're more likely to pay for their child's education if they major in a field that has a higher likelihood of employment is up 11 percentage points year over year. Majors, potential earnings and job growth are all factors that affect the return on education.


  • Info. security analysts36.5%
  • Event planners33.2%
  • Market research analyst31.6%
  • Geographers29%
  • Personal financial advisors27%
  • Operations analysts26.7%
  • Biomedical engineers26.6%
  • Cost estimators26.2%
  • Petroleum engineers25.5%
  • Computer systems analysts24.5%

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Understanding your funding options

Almost 30 percent of parents say student loans will fund most of their child's education, according to the Discover Student Loans survey. But less than one third feel they are very knowledgeable about the difference between federal and private student loans.


feel they aren't very knowledgeable about federal vs. private student loans

Many people don't realize there are limits to federal student loans. Dependent students can only borrow up to $31,000 in Direct Subsidized and Unsubsidized Loans, and independent students can only borrow up to $57,500 in Direct Subsidized and Unsubsidized Loans.** Federal student loans are need based, so not every child is eligible to borrow up to the full amount. Your school decides how much you are eligible to borrow after reviewing the information provided in the Free Application for Student Financial Aid, or FAFSA. Students should also look into scholarships and grants for funding because they don't have to be paid back.

Families who need additional resources to pay for college can consider private student loans as a way to help fund their children's educations.

**For students enrolled at least half-time. Amounts are aggregated. For more information, see

Things to remember before applying for loans

Interest rates vary

Federal Direct Loans are fixed and not based on credit quality. Private student loans are based on your creditworthiness and can be fixed or variable. Adding a creditworthy cosigner may lower your interest rate on private student loans.

Origination fees

Origination fees are charged up front and are deducted from the total loan amount. This means the money you receive is less than what you borrow. As of June 9, 2015, most federal student loans have origination fees and most private student loans do not.

Tax deductible

As long as your student loans were used to pay for qualified education expenses, up to $2,500 of interest paid is tax deductible. This deduction starts to phase out once your income reaches a certain amount. For more information, visit

Borrow responsibly. 1. Maximize grants, scholarships and other free financial aid. 2. Compare federal and private student loans. 3. Choose the loans that best fit your needs.

Click here for the annual survey results and press release.

*The Discover survey was conducted nationally in April 2015, by Rasmussen Reports. The margin of sampling error was +/-3 percentage points with a 95 percent level of confidence.