Nine in ten families believe higher education is an investment in the student’s future, and the vast majority agree it’s part of the American Dream. With so much agreeance on the value of college, the cost of college is probably clear-cut, too, right? Well, not so much.
Like when you’re shopping for a car, the sticker price for college won’t give you the full story on how much a college college actually costs. And while college doesn’t necessarily come with the same negotiating process as shopping for a new vehicle, you can definitely feel stress or uncertainty if you’re not an expert on the different variables that go into determining the price.
For starters, and as you might expect, the choices you make about the type of college and where you’ll attend will impact how much you’ll end up paying. Decisions like private vs. public, 2- or 4-year, and in-state vs. out-of-state, can drive your college costs up or down.
Some families prefer to look at the cost of a single credit hour or semester, especially if you think you’ll take classes here and there. That’s fine, and many colleges will offer the price that way. But comparing the total cost of all classes needed to complete your program with tools like the College Planning Calculator can help you better prepare and build a customized plan.
How much does a college class cost?
First, you can look into the cost per credit hour. Like shopping around at different dealerships for different models, this price tag will vary, so let’s imagine the average cost of a college credit hour is $200. If a class is three credits, or credit hours, then the class cost $600.
While shopping based on credit hour can be helpful, it may be equally (if not more) beneficial to look at your total spend, or the cost it’ll take to complete your program, on average.
What is the Average Cost of College?
To get an understanding of the average cost of college, it’s helpful to hear from college families, many of whom have become experts on planning and paying. According to over 900 families surveyed for “How America Pays for College 2021”, families spent an average of $26,373 on college in 2020-21.
When you’re thinking about the total cost of college, think about the extras. Consider all the expenses associated with completing your degree. Make sure to include room and board if you’re staying on campus, or transportation costs if you’ll be driving back and forth from home or an off-campus apartment. Of course, you’ll need to eat, too, so part of your budget should include the campus meal plan or groceries. You’ll also need to account for books, supplies, and other costs like lab fees, etc. Creating a monthly budget is a convenient way of estimating your future expenses and how much you’ll need to save.
College Cost Estimations and Tools
There are a lot of tools in place to help you access higher education, and you can do it without breaking the bank. Resources include the Free Application for Federal Student Aid (FAFSA®), scholarships, grants, and dedicated college savings accounts (like 529s).
How much should I save for college?
If college is still a few years away, using a college cost calculator can help you figure out how much your total cost of college will be, including a 5% increase in costs each year. If you’re looking at a school’s annual cost this year, add in the number of years until you or your student goes to college and how long you expect to be in college to find out just how much it may cost.
If college is in your near future, you’re probably already looking at different schools. Once you’ve decided on some that you’d like to apply to, it’s likely time to file the FAFSA®, which opens up on October 1 for the next academic year. This is the gateway to $150 billion in federal aid. By filing the FAFSA®, you could potentially unlock free money for college (scholarships and grants), and the opportunity to work on campus in exchange for a paycheck you can apply toward tuition or expenses (work-study). Plus, you can see if you’re eligible for subsidized or unsubsidized federal student loans. All these details will be a part of the financial aid offer letters you’ll receive from the schools that have accepted you for admission.
Once you have your financial aid offer letters in hand, you can start comparing your options. Use a spreadsheet to understand the best financial aid offer, which will be determined by the total amount of expenses against the aid you can secure (and whether that aid is made up of mostly free money, or mostly loans).
Next, look for scholarships. Do this early and often, so you can drive that sticker price of college down even further with the best kind of bargaining tool: free money. Use online search tools, like Sallie Mae’s Scholarship Search (home to more than $24 billion in scholarships) to match with available scholarships.
When it comes to calculating how much college costs, it’s not a simple one-size-fits-all price tag. But with the right tools, and a commitment to do some homework, you can gain a clear understanding of what’s ahead and how much to save for college so you can make sure your college investment is worth every penny. And this investment, unlike cars, won’t depreciate in value once you’re off campus!