The Bogleheads' Guide to Investing, 2nd Edition

Chapter Fourteen Savvy Ways to Invest for College

Economists report that a college education adds many thousands of dollars to a man’s lifetime income—which he then spends sending his son to college.

—Bill Vaughan

It’s a simple fact of life: More education usually means higher earnings over a lifetime. While you may not have seen the official figures, you still know from first-hand experience that most college graduates earn more than high school graduates and high school graduates earn more than high school dropouts. Therefore, when parents sacrifice to save and invest for their children’s college education, they’re actually making a significant investment in their children’s future lifetime earnings, and the payback can be well worth the sacrifice.

Although some may question whether it’s worthwhile to spend the extra money to attend and ultimately graduate from one of the more expensive private colleges, rather than a state university, there’s little debate as to whether either college graduate will be rewarded with increased earnings over their lifetime. What really seems to matter most when it comes to expected lifetime earnings is going to college and graduating with a well-chosen major.

According to the Bureau of Labor Statistics, U.S. Census Bureau figures show that a college graduate with a bachelor’s degree can expect to earn nearly $1,000,000 more than a high school graduate over their 40-year working lifetime. And those with a master’s degree can expect to make more ...