Finance Study Guide
The 411 on College Education
STUDENT'S VERSION
This lesson printed from: http://www.econedlink.org/lessons/index.php?lid=865&type=student INTRODUCTION
One of the most important financial decisions people make is whether to go to college. The price tag of a college education is rising, but so are the benefits. In this lesson, you will begin by learning about the relationship between level of education and the average unemployment rate; and level of education and median weekly income; financing options for college; the importance of filling out the Free Application for Federal Student Aid (FAFSA); and finally, college as an investment in human capital, examine the costs and benefits, and decide whether it is a good choice.
TASK
In this lesson, you will learn to think about education as an investment in human capital. You will examine economic data showing how education is relates to unemployment and income. Next, you will discuss the Free Application for Federal Student Aid (FAFSA) and its importance to the financial aid process. You will learn about wage premiums and investigate the various college options available to students. Finally, you will read a short essay describing the financial costs and benefits of a college education.
PROCESS
Investing in Education
Are you planning to go to college? What are the costs and benefits of college? Cost/benefit analysis is the process of examining the advantages (benefits) and disadvantages (costs) of each available alternative in arriving at a decision. The price tag of a college education keeps climbing higher every year. In fact, the price of a college education is climbing at a faster rate than the average price level of other goods and services. So, is a college education is really worth the price? In other words, do the costs outweigh the benefits?
Economists think of a college education as an investment in human capital. They define human capital as the knowledge and skills that people obtain through
STUDENT'S VERSION
This lesson printed from: http://www.econedlink.org/lessons/index.php?lid=865&type=student INTRODUCTION
One of the most important financial decisions people make is whether to go to college. The price tag of a college education is rising, but so are the benefits. In this lesson, you will begin by learning about the relationship between level of education and the average unemployment rate; and level of education and median weekly income; financing options for college; the importance of filling out the Free Application for Federal Student Aid (FAFSA); and finally, college as an investment in human capital, examine the costs and benefits, and decide whether it is a good choice.
TASK
In this lesson, you will learn to think about education as an investment in human capital. You will examine economic data showing how education is relates to unemployment and income. Next, you will discuss the Free Application for Federal Student Aid (FAFSA) and its importance to the financial aid process. You will learn about wage premiums and investigate the various college options available to students. Finally, you will read a short essay describing the financial costs and benefits of a college education.
PROCESS
Investing in Education
Are you planning to go to college? What are the costs and benefits of college? Cost/benefit analysis is the process of examining the advantages (benefits) and disadvantages (costs) of each available alternative in arriving at a decision. The price tag of a college education keeps climbing higher every year. In fact, the price of a college education is climbing at a faster rate than the average price level of other goods and services. So, is a college education is really worth the price? In other words, do the costs outweigh the benefits?
Economists think of a college education as an investment in human capital. They define human capital as the knowledge and skills that people obtain through