A college education is still one of the highest-return investments most parents will ever make on behalf of someone else…but only if it’s funded with the same intention and efficiency you’d bring to your own retirement. It has become fashionable in recent years to question whether college is “worth it.” Tuition headlines, viral takes about skipping the four-year path, and the rise of trade and tech credentials have all left a lot of parents wondering if the money they’re setting aside for their child’s education is being pointed in the right direction.

At Bowline, we think the data still tells a different story. The economy our kids will graduate into rewards education more than the loudest voices online would have you believe. The real question isn’t whether to save for college, it’s how to do it efficiently and intentionally, in the right order, and with the right tools, so that every dollar you sacrifice today does meaningful work tomorrow.

Why college still matters

The “is college worth it?” debate makes for great podcast clips, but the numbers haven’t changed. According to the U.S. Census Bureau, the average bachelor’s degree holder earns $91,430 per year, 81% more than someone with only a high school diploma. Add a professional or graduate degree and the gap widens to 251%. That additional $41,020 of annual income for a typical bachelor’s grad is enough, in a single year, to cover roughly three semesters of in-state public college. The investment, in most cases, pays for itself many times over.

Beyond income, college changes the entire opportunity landscape. Since 2000, the U.S. economy has added nearly 30 million jobs requiring a bachelor’s degree, while jobs for workers without a high school diploma have actually declined by 3.3 million. Today, 70% of all jobs are held by workers who attended college, and unemployment among bachelor’s degree holders sits at less than half the rate of those with only a high school education. College isn’t just about the diploma, it’s about access to a market that increasingly assumes you have one.

The inflation problem

If college is a great investment, it’s also a stubbornly expensive one and education inflation is in a category of its own. Since 1983, tuition has risen 914%. For perspective, that’s nearly twice the increase of medical care (505%), more than three times housing (261%), and roughly five times the rise in gas prices. The 5.5% average annual rate of tuition inflation has consistently outpaced almost every other line item in the household budget.

The dollar figures get real fast. A four-year, in-state public education for a child born today is projected to cost about $268,000. Out-of-state public runs closer to $475,000, and private schools project to $632,000 over four years. Even families who plan ahead are often surprised by how quickly these numbers compound and that’s exactly why a written plan, started early, matters so much.

The financial aid reality check

Many parents assume that if costs get out of hand, financial aid will fill the gap. The reality is more sobering. Free grants and scholarships pay only a small portion of the bill. On average, need-based grants cover just 11% of total costs at public and private four-year colleges, and merit scholarships add another 13–21%. Tuition costs have risen 45% over the past decade while total financial aid has grown only 11%, leaving families to pay 48% of college costs out of their own income and investments, up from 38% just twelve years ago.

Federal aid eligibility is calculated through the Student Aid Index (SAI), which weighs parental income and assets. Crucially, 529 plans owned by grandparents, aunts, uncles, or other non-parents are not counted at all in the federal aid formula, an underused planning lever that fiduciary advisors should be helping families think through. For most of our Accumulator clients, the planning takeaway is straightforward: don’t bank on aid. Bank on yourself, and let aid be a bonus.

The best way to save: the 529 plan

If you’re going to invest for college, do it inside a vehicle designed for it. The 529 plan is the most efficient education savings tool in the U.S. tax code:

  • Tax-deferred growth on every dollar invested, with tax-free withdrawals for qualified education expenses.
  • Many states offer a state income tax deduction on contributions…including Michigan, but these contributions must be made to the Michigan Specific plans (MESP or MET)
  • Funds can be used for tuition, fees, room and board, books, computers, K–12 tuition, apprenticeships, trade schools, registered credentials, and student loan repayment.
  • Beneficiaries can be changed to other qualifying family members, so the account stays within the family if plans change.

The math compounds in your favor. A $10,000 initial investment with $500 monthly contributions over 18 years grows to approximately $219,950 in a tax-free 529, versus $178,416 in a comparable taxable account, a $41,534 difference, which by itself covers about three semesters of in-state public tuition.

“But what if my kid doesn’t need it?” The Roth IRA rollover

This is the single most common objection we hear, and the law has finally caught up with it. Beginning in 2024, unused 529 funds can be rolled over to a Roth IRA in the beneficiary’s name, free of federal taxes and penalties. The rules:

  • $35,000 lifetime maximum per beneficiary
  • $7,500 annual maximum (the standard Roth contribution limit)
  • The 529 must have been open for at least 15 years
  • The beneficiary must have earned income equal to or above the rollover amount

Translation: a 529 is no longer a “use it or lose it” account. Worst case, your child graduates debt-free and gets a $35,000 head start on retirement, which, compounded for 40 years at 6%, becomes nearly $386,000 by age 65. That’s a remarkable consolation prize.

Choosing the right 529 plan

Not every plan is created equal. When evaluating 529 options, we look at four things:

  1. State benefits – tax deductions, matching funds, and treatment of withdrawals.
  2. Investment choices – diversification, expense ratios, active vs. passive options, and performance history.
  3. Investment manager quality – experience, philosophy, and ongoing oversight.
  4. Investor resources – clean technology, automatic contributions, and gifting tools.

This is exactly the kind of analysis a CFP® and fiduciary partner should be running for you. Bowline helps clients compare in-state plans against out-of-state alternatives, weigh tax deductions against investment quality, and pick the option that fits the broader plan, not just the one with the loudest marketing.

A word on order of operations

We’ll close with the principle that drives all of this. We do not recommend funding your child’s college before your own retirement. There are loans for college; there are no loans for retirement. The most loving thing you can do for your kids is to make sure you’re not financially dependent on them in their thirties and forties.

For our Accumulator clients, however, college funding is one of the very largest goals-based investments they will make outside of retirement and one of the most meaningful sacrifices of today’s dollars for tomorrow’s outcome. Done thoughtfully, with the right tools, the right account ownership, and the right order, it produces enormous returns: financial, emotional, and generational.

Resources for further planning

A few places we recommend clients explore:

If you’d like to pressure-test your current college savings strategy, compare 529 options, or build a written plan that puts retirement first and education a smart second, that’s exactly the kind of work we love to partner on.

Reach out anytime.

Sources: J.P. Morgan Asset Management, College Planning Essentials, 2026 Edition. U.S. Census Bureau, Bureau of Labor Statistics, College Board, Sallie Mae, and Federal Reserve Bank of New York data as cited in the JPM guide.