So, you’ve taken a big fat loan to put yourself through business school. Or, your parents are funding it. For many going to college and funding it is perhaps a family’s most important financial decision. Peter Cappelli, author of ‘Will College Pay Off? A guide to the most important financial decision you will ever make,’ says in an interview on Knowledge@Wharton that for many families college education, if there is more than one child in the house, can be more expensive than even buying a home. “It’s probably fair to say that my view on this is it’s one of the most important decisions you could make because there’s a lot of risk involved,” says Cappelli in the interview.
The way one pays for college (in the US context) has changed a lot over time, he says. Loans are up 150 per cent over the last ten years. The typical costs of college have risen by about four times the rate of inflation over the last generation. “So it’s much more expensive in a period where incomes are more or less flat. The kind of advice that many of us grew up with — college is a great thing, you all should go, it would be wonderful — might not be completely right in the current environment given the costs and given the realities of the job market,” explains Cappelli. Read the whole interview or see the video here .