Watch This Before You Start Saving for College

I knew that college had changed a lot in the years since I graduated—that it is a lot more competitive to get into top schools (the New York Times reported that it is common for kids to apply to up to 20 schools, and, in one case, a record-setting 86!) and, of course, a lot more expensive (it costs nearly $60,000 per year at elite colleges like Harvard, and that's not including books, travel, and other expenses).

What I didn't fully realize is why it is so pricey and pressure-packed these days—until I saw Ivory Tower, from the Emmy-nominated team of Andrew Rossi and Kate Novack. The film questions the cost, values, and methods of America's higher-education institutions. It's a disturbing look at a system in which, at many places, learning almost seems to be an afterthought. Universities are depicted as engaging in an arms race to provide ever-fancier attractions to lure students, from fancy dorms to climbing walls to swimming pools to high-profile athletic programs. Academics, meanwhile, take a back seat: An ever-smaller percentage of most college budgets goes toward tenured professors. Nearly half of all students fail to display significant academic gains after two years of college, and 36 percent reported that they spend less than 5 hours per week studying.

Perhaps the most alarming focus of this documentary is the out-of-control cost of sending a kid to college. Tuition has risen more than 1,100 percent since 1980. As state and federal funding have dried up, student debt has exploded to more than $1 trillion—a figure that exceeds our nation's total credit-card debt. The average student graduates $35,000 under water, and almost half wind up unemployed or underemployed (at least in the short term), creating the environment for a broad-scale debt spiral many can't see themselves escaping.

Before you decide not to open a 529 (or to stop contributing to one), keep in mind that in the long run, college is still very much worth it. Ivory Tower displayed a chart showing that kids who earn a bachelor's degree have an expected lifetime earning capacity that is nearly $1 million more than that of high-school graduates.

Massive Open Online Courses (MOOCs) also loom as a potential low-cost solution. The technology is already in place to bring our nation's top professors right into your living room at a fraction of the price tag of regular tuition. For sure, some kinks need to be worked out: Early experimentation run by for-profit startups has shown poor retention and pass rates among virtual students, largely because they lack the access to one-on-one assistance and group discussions that on-campus students take for granted. Perhaps these shortcomings can be addressed, though.

As for the seemingly unmanageable bill, keep in mind that few families save the entire cost for higher education. Financial aid and scholarships can diminish your expense, and student loans (but hopefully not insurmountable ones) can bridge the remaining gap. My advice: Start saving early, contribute regularly, and keep your fingers crossed that the pundits who believe the rate at which college costs are climbing isn't sustainable are correct.

Baby wearing a graduation cap and gown via Shutterstock

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