Over time, the United States has built a great reputation the world over for offering quality education through its high-ranking colleges and universities. The quality, however, comes with a price tag that can be daunting.
A study conducted by HSBC in 2014 reported that the US is one of the most expensive global destinations for students after Australia and Singapore.
Despite skyrocketing college costs, education is still a big deal for Americans, so much so that they consider spending on education as one of the best investments. Although returns are guaranteed in the long run, several students are debt-ridden and have a tough time repaying their loan.
Planning for College
The ever-increasing higher education costs make budgeting a scary task for students and their families. Saving for college requires careful financial planning that factors in short and long term risks.
Most of the factors influencing college costs are volatile, leading to a discrepancy between actual and expected savings. This often makes students opt for education loans – a financial burden that they have to bear for the rest of their student lives and beyond.
Students can avoid taking huge debts by using some caution and a lot of careful evaluation and preparation. Also, knowing what financial aids are available can help students and their families make informed decisions.
College costs vary from one college to another. While Ivy League colleges and other such private colleges can be super expensive, there are several public colleges that offer quality education at affordable prices.
While there is no perfect formula to calculate the exact college costs, it’s always possible to arrive at averages taking different cost components into account. Some of the different categories that comprise college costs include tuition and fees, room and boarding, books and supplies, and transportation.
As per the data made available by College Board, the average college cost varies between $16,000 to $60,000 per year depending on the type of college one opts for. The following chart
provides the cost breakup for different types of colleges.
Data source: College Board
Paying for College
While college costs seem intimidating, there are different financial support options available for students.
Eligible students receive financial support from colleges in the form of:
- Financial aid: Grants, work-study loans, and scholarships. Students don’t have to repay any money received as aid.
- Need-blind admission policy: Some elite colleges follow this policy where they pledge to offer necessary aid to every successful applicant irrespective of their financial background.
- Installments: Fees can be paid in parts depending on the college’s academic calendar.
- Work-study loan: An opportunity that allows students work part-time to earn money to take care of college expenses.
- Loan: Students can avail loan to pay tuition fees or in case of financial emergencies.
College Cost Computation
Based on the program choices made by students, there are many calculators that provide students an estimate of how much college education is going to cost them and what their loan figures are.
Also, colleges and universities are legally obligated to add annual fees and financial aid calculator on their webpage.
With all the necessary information available in just a few clicks, estimating college costs in the U.S. is no longer as difficult as it used to be.