The True Cost of a College Education

Consider all tuition expenses so you can manage your budget and earn a college degree

A college education is crucial, particularly in today’s challenging job market. Not only does a college or university degree drastically improve a person’s chances of earning his or her dream job, but it also helps ensure a higher salary.

According to U.S. News and World Report, those who hold bachelor’s degrees typically earn roughly $2.27 million in their lifetime. Conversely, people who have only their high school diplomas usually make about $1.30 million in lifetime earnings.

“The payoff from getting a college degree is huge and is actually increasing,” said Jamie Merisotis, president and chief executive officer of Lumina Foundation, a nonprofit organization that focuses on boosting the number of college graduates in the United States. “For people wondering [if] a college degree [is] worth it: Not only is it worth it, but the premium is growing.”

Gaining an edge in today’s job market is vital, which is making it more important than ever before for both kids and parents to save for school. A recent Millionaire Corner Survey showed that 34 percent of investors said they were currently involved in paying for a child or grandchild to go to college. Meanwhile, 46 percent of these people were concerned about college expenses.

Despite the challenges that surround paying for a college education, there’s tremendous value in getting a degree. However, those who consider the actual cost of tuition – not just the list price – can budget accordingly.

Check out the following tuition expenses to fully understand the true cost of a college education.

  • Housing – College housing is crucial, and the costs of living on- or off-campus vary widely in cities and towns nationwide.Recent U.S. Census Bureau data revealed that 12 percent of college students live on campus. It might prove more cost effective, however, to save money, live at home and commute to campus. Start searching for housing early and review all housing expenses before enrolling in school to determine what option works best.
  • Food – Many colleges and universities require students to sign up for meal plans while other schools may allow pupils to simply buy groceries and cook meals on their own. Weekly, monthly and semester budgets often are helpful for those who are trying to better understand food costs. In addition, picking up a few cookbooks or looking for recipes online is great for those who want to make tasty meals on a budget.

  • Books – Remember, classes change every semester. The U.S. Government Accountability Office notes that textbook prices have risen three times faster than inflation over the past 10 years, a trend that may continue in the foreseeable future.Fortunately, purchasing books online or at secondhand bookstores may be cheaper than buying directly from a college or university. Students can also sell their books at the end of each semester and use the money toward future college expenses.
  • School fees – Tuition is more than just the list price, and many schools charge extra fees that aren’t always included in the initial tuition price. Parents and students need to review every expense associated with a college or university prior to enrolling. Ask questions when selecting a school to avoid potentially expensive school fees down the line.
  • Incidental expenses – Emergencies can happen without notice, and it never hurts to have extra money in the bank. Putting aside even a little money helps, and those who do so may reap significant rewards down the line. 
According to Scholarship Experts, the list price tuition and fees charged by American four-year colleges and universities has increased at an annual rate of 7.1 percent. As the U.S. economy improves, these costs are likely to rise as well, but understanding the true cost of college education allows parents and students to prepare.

Used with Permission. Published by IMN Bank Adviser 
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