College costs have increased more dramatically than the rate of inflation. When a college education for a single child can cost over a quarter of a million dollars, paying for college is a real stretch even for many affluent families. Here’s an overview of what you need to know about college costs.
What Does College Cost?
It is surprisingly difficult to give a single answer to that question. It depends on the type of college and the amount of merit scholarships and financial aid an individual student receives.
As you look at college costs it is important to remember there is more than tuition to consider, there are also costs for room, board, fees, books, living expenses, and transportation. According to the College Board, Trends in Pricing here are the average published 2020-2021 costs:
• Public, Two Year: $18.550
• Public Four Year In-State: $26,820
• Public Four Year Out of State: $43,280
• Private Four Year: $54,880
We need to remember these are just averages and costs vary widely. Some examples for the 2021 year of published costs (before scholarships or financial aid):
• University of Washington, out of state: $56,981
• Princeton University: $76,144
• University of Minnesota, out of state: $47,535
• Pomona: $75,694
• Georgia Tech, out of state: $46,684
• UCLA, in state: $33,166
• University of Texas, Austin, out of state: $55,704
• Tufts University: $79,000
Sticker Price versus Your Cost
Just like with car shopping, most families do not end up paying the full “sticker price” for college. The price you pay, also called the net price, may be lower due to merit scholarships and financial aid. Merit scholarships are given to students without consideration of financial need. Merit scholarships recognize a student’s accomplishment in academics or in areas such as community service, arts, and sports. Families who seek to maximize the amount of merit aid their students receive are advised to plan during high school paying attention to academic performance, planning for testing, and developing extracurricular interests. Careful planning of the college list can also offer an advantage in merit scholarships.
Families often fail to accurately guess their eligibility for financial aid. Middle class families are typically upset when they find out they qualify for less than they expected, and some upper-middle class families who assume they are ineligible may be surprised to find out their student receives some aid if they choose a higher cost school.
Instead of guessing, the best approach is to begin with assessment of what your student may qualify for. There is an easy online tool every family should investigate.
Net Price Calculators Net price calculators allow families to get an estimate of merit and financial aid awards at different colleges. This is the best tool for getting an initial estimate of costs at the schools your student is interested in.
Avoid the Senior Year Fiasco
Understandably, many parents feel uncomfortable talking about finances with their kids. They may not want to stress out their kids or they prefer to just believe that one way or another it will work out. This approach can be problematic for many reasons. Far too often it ends with a bad situation senior year. The teen may assume that as long as they get into a particular college that parents are willing and able to finance it. So, students may get their heart set on an unrealistic choice and when the offers come in spring of senior year, they have to face reality. Their parents don’t think NYU is worth $150,000 more than the very good small liberal arts college that thanks to a large merit scholarship offer will cost less than half the price. This problem can be avoided by open conversations and a realistic look at the options earlier in the process.
Talk Early in High School
Many teens benefit from hearing early in high school that their choices will make a difference in college choices and college costs. A motivated high school student who commits to very seriously studying for the ACT or SAT, to getting good grades, and to applying for scholarships can often shave thousands of dollars off the price of college. It may help for your student to think of this as a potentially very lucrative job that may end up paying hundreds of dollars an hour. Talking early about your expectations allows students to plan.
Graduation Rates Make a Big Difference in Costs
Parents may not realize that just over half of students who begin college ever graduate. Those who do graduate are often taking more than four years. Delayed graduation is such a trend that education analysts now speak primarily in terms of the six year graduation rate, as though we’ve all just accepted college now takes six years. As you consider college options, one factor to consider is the graduation rate and typical time to graduation. This can make a huge difference because the price of four years at a private college with a higher four year graduation rate may be less than six years at the lower cost state university where graduation more often takes five or six years.