For most of the past two academic years, college students have taken classes remotely, without the benefit of campus life. Many of them—and their parents—have complained that they’re not getting their money’s worth.

While some schools have given reimbursements, the situation has led to a re-evaluation of college’s cost-effectiveness. Is it still worth the hefty price tag?

“Parents intuitively know that one of the great benefits of college is learning to live on your own,” says Tom Henske, a partner at Lenox Advisors in New York City. But many are beginning to reconsider, he says. “Once we are vaccinated and back to a more normal life, people are going to be rethinking their college savings.”

Economic Decisions
Some already are. The pandemic caused some parents to lose their jobs. Others can no longer afford to save or pay for college. Even the government is attuned to these stresses. The Biden administration has talked of forgiving some student debt and making community colleges free—and making certain four-year colleges free as well for low-income families.

At the same time, ironically, the bull market pushed many 529 college savings plans—the tax-advantaged accounts that can only be spent on tuition and other college-related costs—into record territory. By one estimate, their aggregate value swelled to $425 billion.

This has caused many college savings plans to “achieve their goals ahead of schedule, giving parents and grandparents opportunities to shift college savings allocations to other priorities,” says Steven Skancke, chief economic advisor at Keel Point in Vienna, Va., and a professor of international affairs and economics at George Washington University in Washington, D.C.

Others prefer to stay the course. “For my clients who were in the process of saving for college, most have continued on course,” says Seta Keshishian, a financial planner at JSF Financial in Los Angeles. Still, she adds, if colleges remain remote, “it would require re-evaluating the costs and benefits.”

The Case For College
No one is suggesting that college should be scrapped altogether. “A college degree leads to higher lifetime pay and arguably better job satisfaction, as you would qualify for more higher skilled jobs,” says Jody D’Agostini, an advisor at Equitable in Morristown, N.J. “Since these jobs are generally not physical in nature, you are able to continue working later in life, and therefore you have enhanced earning potential.”

The median annual salary for college graduates, she says, is $64,896; it’s only $38,792 for those who have only a high school diploma. Jobs that require a college degree are also more likely to come with benefits such as health insurance and a 401(k) retirement plan.

Moreover, she says, the unemployment rate for college grads is much lower. Earlier in the year it was only about 3.8% while it’s around 10% for high school grads. Over a lifetime, she says, “this could translate to a difference of hundreds of thousands of dollars.”

The Case Against College
On the other hand, many college graduates incur huge student loans. More than half had a debt load of $37,584 last year, says D’Agostini. Nationwide, that comes to more than $1.6 trillion.

There are less expensive options. Chris Powers, a senior vice president and managing director at Girard in King of Prussia, Pa., points to state schools, for example, which are cheaper than private institutions. There are also two-year community colleges, where students can pursue an associate’s degree and then, if they want, spend an additional two years at a traditional college.

Powers also points to trade or vocational/technical training schools and to online or part-time schools that allow you to work and study at the same time. Another option is ROTC programs, in which the military subsidizes higher education in return for a commitment to some military service after graduation.

“Each branch—Army, Navy, Air Force, Marines, and Coast Guard—has its own programs depending on what the student wants to study,” he says.

The Case For Community Colleges
Ric Edelman, founder of Edelman Financial Engines in Fairfax, Va., suggests that students should consider earning college credits in high school and then attending a community college for two years before transferring to a state school for the final two years to earn a bachelor’s. “They’d save massive amounts of money—as much as half or more of the total cost of the degree,” he says.

Even on their own, associate’s degrees from two-year colleges are worthwhile. Between 1991 and 2015, says Martin Van Der Werf, associate director at Georgetown University’s Center on Education and the Workforce, the number of jobs that paid at least $35,000 a year declined by 8% for high school grads but increased by 83% for holders of associate’s degrees. “We are reaching the point where 14 years of education is the expected minimum,” he says.

The Case Against Community Colleges
But the right choice depends on the individual student’s objectives. “If your goal is to obtain a bachelor’s degree, taking a detour through a community college may cause you to miss your destination,” cautions Mark Kantrowitz, a student loan and financial aid expert.

Only a fifth of students who start at a community college go on to graduate with a bachelor’s degree within six years, he says, compared to two-thirds of those who start at a four-year college. Kantrowitz notes that dropouts suffer the most because they are left with debt but no income-boosting degree. They are “four times more likely to default,” he says.

He suggests a formula for calculating risks and rewards: “So long as your total student loan debt at graduation is less than your annual starting salary, college is still a worthwhile investment,” he says.

Creative Accounting
If your plans have suddenly changed, though, what happens to funds already squirreled away for college? Jack Furlong, advisor at Ameriprise Financial Services in Hibbing, Minn., says he has clients who “spent many years building massive college savings funds and now their children are going to community college or taking online classes for less money.”

Because they’ve shifted their focus from accumulating funds in 529 plans to taking distributions for other purposes, they’ve had to “get creative and figure out ways to get money out of these specialized accounts without incurring penalties and significant tax consequences,” he says.

That might not be a bad thing. “Other than on the Las Vegas strip, I don’t know if you could find a business that’s more expensive, cutthroat, or desperate to bring people in the doors than [four-year] colleges,” says Furlong.

To him, the pandemic just illuminated what college skeptics have been saying for a while—that four-year colleges are overpriced, and you can get a quality education from smaller and less expensive schools.

“It’s no different than purchasing a Cadillac over an Impala,” he says. “Both can be very nice cars and get you to the same place.”