College costs can seem staggering. For the 2021-22 school year, the average annual total cost was $55,800 for a four-year private university and $27,330 for a four-year public university (Source: Trends in College Pricing, 2021). It’s no wonder that students and parents alike wonder whether college is really necessary.
To help answer that, consider the median earnings by level of education for 2018 (most recent year available):
-Professional degree $120,500
-Doctoral degree 102,300
-Master’s degree 80,200
-Bachelor’s degree 65,400
-Associate degree 50,100
-Some college, no degree 46,300
-High school graduate 40,500
-Not a high school graduate 30,800
(Source: Education Pays, 2019)
In terms of paying back college costs, the College Board estimates the typical college graduate who started college at age 18 will earn enough to compensate for tuition and fees at the average four-year public university as well as for foregone earnings during those college years by age 33 (Source: Education Pays, 2019). While that doesn’t sound like a bad tradeoff — breakeven by age 33 and then earn substantially more for the rest of your life — keep in mind that those figures only include the cost of tuition and fees at a public university. Room and board adds another $11,950 annually to the cost.
And, if your student goes to a private university, the costs are typically double what you pay at a public university. Those figures also don’t consider how you pay for that education. If you pay for that college education primarily with student loans, it could take a lot longer than age 33
to breakeven. That doesn’t mean your child shouldn’t go to college, just that you may need to reevaluate how much you want to spend on that education.
Consider these strategies to reduce the cost of a college education:
-Look for scholarships that are not based on need. Generous merit scholarships are often available to students with outstanding high school grades and above-average entrance exam scores. Scholarships may also be available for athletes and for those with strong music backgrounds. If your student has qualities that a college is looking for, that college may be more willing to offer scholarships to attract him/her.
-Apply to several different colleges. Don’t make the mistake of thinking that aid packages will be the same at all universities. You may be surprised at how wide the differences can be. Even if your child is set on one school, it is generally wise to apply to several different colleges. This is especially true in these economic times when more students are applying for aid and colleges have less aid available.
-Talk to the university. If the financial aid package is not sufficient, talk to the financial aid officers at the university. By explaining extenuating circumstances or showing the college offers from other universities, you may be able to increase your aid package.
-Don’t overlook state public universities. Costs of public universities, especially in your state, are typically much more affordable than private universities.
-Decide whether it makes sense to go to an expensive private college. First, you need to evaluate how much financial aid your student would be entitled to. If you are still left funding much of the cost yourself, consider whether your child’s intended career makes it a good investment. If your child intends to pursue a career with limited salary potential, you may not want to send him/her to an expensive college.
-Consider starting at a two-year college. Two-year colleges are often much cheaper than four-year colleges, especially when you consider that most students live at home while attending. For instance, for the 2021-22 school year, the average cost of tuition and fees at a public two-year college is $3,800 compared to $10,740 at a public four-year college and $38,700 at a private four-year college (Source: Trends in College Pricing, 2021). Before starting, however, your child should determine which four-year college he/she will transfer to and make sure all of the credits from the community college will transfer to the four-year college.
-Send more than one child to the same university. Many universities offer discounts on
tuition if more than one child attends at the same time.
-Accelerate your child’s studies. You can save a significant amount of money if your child can complete a four-year degree in three years. Another alternative is to have your child take summer courses at a local community college. High school students may be able to take courses at a community college, which will then transfer as college credits. Advanced placement courses may count as college credit. Please call if you’d like to discuss this topic in more detail.