College can be an incredibly expensive endeavor, with a typical year currently costing around $24,610 in an in-state public college and around $49,320 in a private school. In all, that's somewhere in the neighborhood of between $100,000 and $200,000 to earn a four-year degree.

That hefty price tag makes us wonder whether a college degree is worth the price of admission. It just might be. The average college graduate currently earns $50,556 in his or her first year out of college, which isn't that far off from the median overall household income of $56,516. That gives a typical college graduate a strong chance at a middle-class or better lifestyle, right out of school -- with, of course, opportunities for advancement along the way.

College graduation cap sitting on a bunch of money.

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What's the catch?

Of course, a college degree isn't an automatic path to financial success. Starting salaries vary wildly by major, with petroleum engineers topping the list above $80,000, while education majors can expect to see their first paychecks closer to $35,000 per year. In addition, those college costs need to be paid, either up front or over time with interest. The terms on student loans are particularly onerous, in that unlike most other forms of debt, they're rarely dischargeable in bankruptcy.  

A balance showing a pile of gold coins on one side and a clock on the other -- signifying that time is money.

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Financially speaking, if the money spent on a college education were instead invested with an eye for the long term, it could potentially turn into a several-million-dollar nest egg by retirement. A single $100,000 investment compounded at 8% average annual returns for 47 years can turn into over $3.7 million, and $200,000 invested at the same rate for the same amount of time can wind up over $7.4 million. 

Over the long run, average stock market total returns have been in the neighborhood of 9.5% per year, making an 8% return estimate in the realm of feasible, though of course there are no guarantees. Forty-seven years takes an 18-year-old to age 65, spanning the range from a typical college freshman to the traditional retirement age. Given that the median net worth for a household led by a 65- to 69-year-old is in the neighborhood of $200,000, that's a serious opportunity cost lost for the sake of a degree.

Still, college can be worthwhile

Of course, to reach that multimillion-dollar level, that money has to remain invested, untouched for decades. That's easier said than done, especially since the unemployment rate for people with only a high school diploma is about twice as high as the unemployment rate for those with a bachelor's degree. That nest egg is a tempting target to get tapped to cover living costs in a period of unemployment, even if a person is otherwise convinced that letting it compound is the right path to longer-term wealth.

In addition, the median weekly earnings of a person with a bachelor's degree is $464 more than that of someone with just a high school diploma, adding around $24,000 per year of typical earnings power.  That additional income can go toward paying back college debts, building up a savings buffer, and allowing the typical college grad to also save up a multimillion-dollar nest egg for retirement.

How to make college a smart investment

A graduate holds money tied up in a bow.

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Given the opportunities that a college degree can enable, it can still make sense for many people to pursue a degree. To make it worthwhile, though, it's incredibly important that a student not get trapped by debt in pursuit of a low-paying degree. Fortunately, even in today's era of six-figure total college costs, there are ways to help keep debt away.

Starbucks (SBUX -1.21%), for instance, offers full- and part-time employees who put in at least 20 hours per week 100% tuition coverage, in collaboration with Arizona State University. Especially if your dream career is in a field that doesn't tend to pay all that well, there's nothing wrong with taking a job at Starbucks to work your way through college. Other employers also offer varying levels of tuition reimbursement, making it possible to get a job and work through school at the same time.

The military also offers ROTC programs that will pay a large portion of your college costs, in exchange for a commitment to military service. Note that many of the ROTC programs tend to be selective for students studying in engineering, science, or foreign languages -- skills that can be useful for the military during that service commitment. 

If joining the service or serving coffee don't cut it for you, there are other ways to cover the costs of an education. Many schools offer co-op programs that allow students to get real-world experience related to the fields they're studying. The money you earn during the work part of the co-op program can go a long way toward covering your education costs. As a bonus, many students find the companies they co-op for are eager to hire them upon graduation, giving them a jump start on their careers.

There are also campus jobs, summer jobs, paid internships, work-study jobs, scholarships, and campus research programs as ways to earn money to cover college costs. In addition, most schools allow for part-time students who take fewer credit hours and thus pay less overall per school year.  If you follow that path, you'll probably take more than four years to finish your degree, but you'll also have a better shot of covering most of the costs through work.

Be smart about college choices to make it a good investment

Between the higher salary potential, the lower unemployment rate, and the myriad ways to cover the costs beyond just student loans, college can still be a great investment of your time and money. Just be sure to be smart about the way you're paying for your degree, and don't expect more from that degree than you can truly expect to earn once you receive it. That way, you will improve your chances of receiving the benefits of your education without the crushing debt that may otherwise result.