The article “Which Pays Off More: Getting a University Degree or Investing the Tuition Money?” was originally published on The Financial Post on February 20, 2015.

As university tuition fees continue to rise and graduates have trouble getting good-paying jobs, parents and students alike might be wondering if university is even worth it any more. Maybe kids are better off financially by not going to university, in the long run. Let’s crunch some numbers.

Tuition fees have been rising by much more than the annual rate of inflation in this country. According to the Canadian Federation of Students, tuition fees rose by 3% in excess of inflation last year. If tuition fees had risen with the rate of inflation over the past 20 years, a recent Canadian Centre for Policy Alternatives (CCPA) study says tuition fees should be about $3,665, not the nearly twice as much Canadian students pay – a whopping $7,549 per year.

Based on the CCPA data, the average cost of a four-year university program beginning in 2014/2015 is $68,933 for students living away from home, including tuition and accommodation.

After kids get their degrees, the prospects of making that hard-earned money and study pay off aren’t great. Youth unemployment in December 2014 was 13.5%. A recent report from the Canadian Labour Congress says the underemployment rate – those working in jobs unrelated to their field after graduating – is about twice the unemployment rate. This means that less than three-quarters of Canadian graduates are able to land an entry-level job in their area of study.

Here’s a different scenario: What if kids took the $68,933 for their degree and invested it, instead of spending four years at school? Assuming a 5% return annually over 45 years, it would be worth about $619,364. Plus they’d be able to get started early and spend four extra years working as baristas, dog-walkers or rock stars.

In the extreme scenario that they lived at home with Mom and Dad, and could bank 100% of their after-tax earnings from the $30,817 average high school grad employment income for four years, and invest it at 5% through retirement, they’d have about another $800,000. So call it $1.4 million extra going into retirement from bringing in money during the first four years after high school instead of shelling out. Not bad. Not that $1.4 million would buy them nearly as much in 45 years’ time, but still, it’s not chump change.

The Council of Ontario Universities counters with a $1.4 million estimate of its own, in a recent report. That’s the estimated excess earnings over a 40-year period that a university grad will make relative to their high school educated peers. However, this doesn’t take into account any increase in earnings due to inflation.

Using a 2% inflation assumption, the excess might be closer to $2.1 million – nearly 50% more than our notional savings from skipping university in favour of working. And if we assume that they invest those excess earnings at 5%, that $2.1 million excess may be closer to $3.8 million.

On that basis, it seems a university degree pays off – literally.

A $3.8 million projection may seem like a high number, but keep in mind that’s only about $1.6 million in 2015 dollars. Does that mean that university graduates will retire $1.6 million richer than their high school educated counterparts? Not likely. They’ll probably live in bigger houses and drive more expensive cars and take more vacations. But consider this: They are more likely to be more financially independent during their working and retirement years.

Financially, university makes sense in the long run, if you can foot the bill in the short run. It may also open a lot of doors compared to not having a degree, leading to a happier life.

One of the keys to making a university education worth it is considering fields that are in demand – the so-called STEM fields, such as scientists, technologists, engineers and mathematicians. Keep in mind that many employers complain university grads lack soft skills like communication that should  be honed, in addition to the book smarts that a degree delivers.

In retrospect, this university educated financial planner is glad he did his stint and is actively saving for his children’s university degrees. I always kind of figured it was worth it – now I have some figures to back that assumption up.

Jason Heath is a fee-only Certified Financial Planner (CFP) and income tax professional for Objective Financial Partners Inc. in Toronto, Ontario.