So, a little one is not so little anymore. And they are planning on heading out for college in a few years. Yes, you’ll miss them greatly. But right now your greatest concern is likely not emotional (yet). It’s financial: How will you help pay for college? In today’s economic environment, you have every right to be concerned. But taking some time now to make informed decisions can take some of the worry away. 

A family decision 

Sallie Mae released a national study in 2021 called  How America Pays for College. In that study, 80% of students and parents surveyed agreed that a college education offers the best opportunity for the student's future and they are willing to make the investment1. Currently, that total investment, including tuition, fees, room and board, is around 

  • $10,950/year for a 2-year public institution. 
  • $20,598/year for a 4-year public institution. 
  • $44,662/year for a 4-year private institution.2 

Parents and students are sharing the brunt of these costs. They are tapping into their income and savings. They’re borrowing. They’re getting grants and scholarships. And, more and more, they’re making plans for how to pay for college. They’re doing this before students even start1. 

Choosing the best option 

Cost may be a concern. But tuition price should not be the only thing you and the student considers when looking for colleges. Sometimes a more expensive school can turn out to be more affordable when you factor in available financial aid. You should also think about the cost of room and board, books and other expenses. And you could look into whether a work/study program is an option. 

The Department of Education provides information about college costs. It has developed several College Affordability and Transparency Lists. You can find them at https://collegecost.ed.gov3. You can search based on your preference. View stats for public, private, 4-year, or 2-year or less schools. You can also see tuition and net prices. Comparing apples to apples will help you start making your selection. 

More resources 

There are many different kinds of resources and tools available to help you calculate and plan for college costs. Check some of these out: 

Paying it back 

Fast-forward several years. Teary-eyed, you hug your graduate beaming in their cap and gown. They graduated! Now they, along with the other 32% of students who took out loans to finance their education, need to start paying their college costs.1 

 A student loan is not a debt that can be dismissed. It is a real loan. It must be repaid. There are many repayment options. Some call for repayment within 10 years following graduation. Other options may allow you up to 25 years to pay back loan6. 

Ready for the future 

In today's economy, a higher education can be crucial for opening doors. The worldwide job market is very competitive. Candidates need to be ready to meet employers’ rising standards. 

A higher education is a worthy investment. But, as with all investments, there is a lot to consider. With the right information and resources, you and your child can now make one of the most important decisions of their life. Here's to a great future! 

 

Sources:  

  1. Sallie Mae. 2021 How America Pays for College. Accessed December 28, 2021. https://www.salliemae.com/content/dam/slm/writtencontent/Research/HowAmericaPaysforCollege2021.pdf   
  2. National Center for Education Statistics. Tuition costs of colleges and universities. Accessed December 28, 2021. https://nces.ed.gov/fastfacts/display.asp?id=76 
  3. U.S. Department of Education. College Affordability and Transparency Center. Accessed December 28, 2021. https://collegecost.ed.gov/ 
  4. National Center for Education Statistics. College Navigator. Accessed December 28, 2021. https://nces.ed.gov/collegenavigator/  
  5. CollegeBoard. College Starts Here. Accessed December 29, 2021. https://www.collegeboard.org/ 
  6. Consumer Financial Protection Bureau. How long does it take to pay off a student loan? Accessed December 29, 2021. https://www.consumerfinance.gov/ask-cfpb/how-long-does-it-take-to-pay-off-a-student-loan-en-621/ 
  7. 7 Federal Student Aid. Student Loan Delinquency and Default. Accessed December 29, 2021. https://studentaid.gov/manage-loans/default#consequences-default 
  8. 8 Federal Student Aid. Manage Loans. Accessed December 29, 2021. https://studentaid.gov/h/manage-loans