Kids: Draining the tap faster

My quarterly IDeal - Idaho's college savings program - statement arrived in my inbox this month, reminding me that September is college savings month. With $2,000 in tax-free contributions allowable each year and a child in high school, it pays to participate. Every dollar counts and these days, it takes more dollars to afford even the least expensive educational options.

Never mind that; according to the U.S. Department of Agriculture (Ag? sounds like we're raising cows) the cost of raising a child has gone up a shocking 40 percent in the last decade. In 2000 just providing the basics to a child cost $9,860 a year; in 2010 it cost $13,830. That's a total of $226,920 required for an average income, two-parent family to raise a child to 18.

The USDA says everything - e.g., groceries, clothes, health care, and child care - has gone up significantly. A trip to the grocery store makes that change obvious. Average gas prices jumped 85 percent since 2000, according to the American Automobile Association. Health care costs rose 58 percent in the same period. Average child care costs for two kids exceed the average family's rent payment in all U.S. states, according to "Parents and the High Cost of Child Care: 2011 Report."

Now consider the fact that median income has not risen, but fallen 7 percent in the last decade, according to Census Bureau figures reported by CNN. Doing more with less is no longer just good advice; it's a survival tool.

While higher education may be pricier, it still makes good sense, at least in the long run. According to College Board's (they give the SATs) "Trends in Pricing 2010" report, over the last decade average college tuition at public institutions rose up to 5 percent per year above the cost of inflation and, over the 10-year period, it totaled 28 percent more at private, nonprofit institutions. Now before you form a picture, note that College Board also reported net cost actually went down during some of that time, with increased grants and other aid packages. College costs vary widely by institution and individual situations.

Yet consider the benefits of more income potential. According to the Census Bureau, a college degree nearly doubles annual earnings. Between the College Board's 2007 and 2010 reports, "Education Pays," college graduates' median earnings increased more rapidly than those with high school diplomas only, and the unemployment gap between the two groups grew.

The same report documents college graduates have better health, vote and volunteer more. Median annual earnings for someone with a four-year college degree are $55,700, or $21,900 more than high school graduates (after taxes, the difference is $16,000). Even those with some college but no degree earned 17 percent more than those without it.

Prior reports based on College Board and Census figures tout a lifetime college degree advantage of $800,000 to $1 million. A February 2010 Wall Street Journal article saw that figure skeptically, citing dubious math and pointing out that simple multiplication doesn't take into account future unknown costs, debt loads, and periods of unemployment.

Regardless of exact dollar amount, especially in an increasingly competitive marketplace, more education is an asset which soon exceeds its costs.

At least for the student.

Sholeh Patrick is a columnist for the Hagadone News Network with four, unregretted taps in the family checkbook.