So you or your student decided college is in the plans. Awesome! But have you addressed the looming question… How will I pay for it?
“A good rule of thumb is that undergraduate and graduate students should borrow no more for their entire education than their expected salary at graduation.” *
Well, you’ll have tuition, and don’t forget the others costs—housing, student fees, books/supplies, living expenses, etc. According to the CollegeBoard.org:
- The anticipated cost for an in-state college for the 2013-14 school year averaged over $18,000
- For a private college, it was over $40,000
The average tuition increase for a public university was 2.9%, and for a private college, 3.8%. The ten-year historical rate of increase is approximately 5%, not only substantially higher than the general rate of inflation, but also higher than the average increase in personal income:
- From 2002 to 2012, declines in family incomes ranged from 13% over the decade for the bottom quintile to less than 0.5% for the top quintile
The Wall Street Journal also posted a blog titled Congratulations to Class of 2014, Most Indebted Ever with even more stats to help you understand the reality of financing a college education. It may sound bleak, but better to know what to expect than go into major debt not realizing the implications later.
So yes, it costs a whole lot. But then again…
- In 2012, the $101,909 median family income for families headed by a four-year college graduate was more than twice the median income for families headed by a high school graduate
- College graduates have a lower unemployment rate
- The more education a person has, the greater the pay advantage becomes (although that, too, comes with even higher costs)
So while higher education certainly comes with a higher price tag and its costs will likely not decrease anytime soon, the only option if you’re not independently wealthy is to uncover as many options for student financial aid as you can find.
Browse all the resources and options we’ve compiled in this section, and let us know how Vantage Credit Union can help you take the bite out of higher education costs.