The cost of a college education: tuition + a whole lot more
Paying for a college education is a daunting prospect. Tuition costs keep rising, but there are other costs to consider that can more than double the price tag.
First of all, just what does tuition cover? This is what you pay for classes, instruction and labs. You have some control over how much you pay here by your student's choice of college. The table below reveals those differences. It also shows how prices rose in just one year. Now note how adding "Room and Board" dramatically boosts the cost. And there are other bills your student will incur: transportation, textbooks, a cell phone, a computer, plus miscellaneous expenses.
Average published charges for full-time undergraduates by type and control of institution, 2014-15 (Enrollment-Weighted)
|PUBLIC TWO-YEAR IN-DISTRICT||PUBLIC FOUR-YEAR IN-STATE||PUBLIC FOUR-YEAR OUT-OF-STATE||PRIVATE NONPROFIT FOUR-YEAR||FOR-PROFIT|
|Tuition and Fees|
|Room and Board|
|Tuition and Fees and Room and Board|
Prices in this table are not adjusted for inflation. Public two-year room and board charges are based on commuter housing and food costs. Tuition and fee figures for the for-profit sector should be interpreted with caution because of the low response rate. Enrollment-weighted tuition and fees weight the price charged by each institution by the number of full-time students enrolled in fall 2013. Public four-year in-state charges are weighted by total fall 2013 full-time enrollment in each institution, including both in-state students and out-of-state students. Out-of-state tuition and fees are computed by adding the average in-state price to the out-of-state premium weighted by the number of full-time out-of-state students enrolled at each institution. Room and board charges are weighted by the number of students residing on campus for four-year institutions and by the number of commuter students for public two-year institutions. Source: Trends in College Pricing. © 2014 The College Board. www.collegeboard.org
The sooner you start planning, the better
There are two big ways you can start to get your checkbook ready for college costs:
- Saving for college - The number one thing, like saving for anything else, is to start early. There are many ways to save besides a basic savings account at your local bank. Consider a 529 Plan (state-sponsored college saving plan) or UGMA/UTMA (tax-advantaged gift to minors account). Your VALIC financial advisor can help guide you through the types of accounts available.
- Financial aid (including grants and scholarships) - You may think you're not eligible for any sort of financial aid, but don't reject this path without first doing some research. According to The College Board (2013-2014), $185 billion in aid is available. The four main sources for this aid are the federal government, state governments, colleges and universities, and private organizations.
Remember! To be considered for any kind of financial aid, you must submit an application to the organization offering the aid.
Does a college degree affect earning power?
The answer is yes. In 2011, earnings for those with a bachelor's degree working full time were $56,500 - which is $21,100 more than the earnings of high school graduates. And over time, this trend continues. While bachelor degree recipients' earnings outstripped those of high school graduates by 54% ($15,200) for 25- to 29-year olds, the gap increased to 86% ($32,000) for 45 to 49-year-olds.*
* Education Pays 2013, Trends in Higher Education Series, by Sandy Baum, Jennifer Ma, Kathleen Payea, The College Board. Securities and investment advisory services offered through VALIC Financial Advisors, Inc., member FINRA, SIPC and an SEC-registered investment advisor.
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