How Much WIll College Cost??
I’m moving in a few weeks. Not across the country, just from Scottsdale to the South Mountain section of Phoenix. It's a total distance of about 20 miles; however it might as well be in another state. All of the boxing, re-boxing, sorting and organizing is a nightmare. Probably the only bright spot in all of this is finding things I haven’t seen in years. Unless you are super organized, you probably know what I’m talking about. Its kind of like an archeological dig. Take for example this rare book that has been sitting on my book shelf for years: The 1986 Skidmore College course catalog.
As I leafed through it, reminiscing about college and avoiding the overwhelming task at hand, I came across this archeological artifact – the cost of Skidmore College in 1986. In 1986 The total cost of attending Skidmore College including tuition, dorm and board was a whopping $14,600.
What would a year at Skidmore cost today? According to the 2018 – 2019 course catalog, which is conveniently located on-line, Skidmore College today would cost a eye popping $68,764 a year! That's a 371% percent increase over 32 years! Or annualized – an increase of 4.85% per year! According to the College Board, over the last 30 years, tuition increases at private 4-year colleges has increased an average of 2.8% while public universities have averaged a 3.8% increase per year.
The College Board recommends that for the 2017-2018 academic year, one should budget $25,290 for tuition, room, board and fees for an average-priced in-state 4-year public university and $50,900 for a typical private institution. No doubt Skidmore’s cost is above average; nevertheless – its ranked #51 in the nation for “best value” by US New and World Report. (The same article ranks Skidmore #41 in the nation - meaning I probably would never get accepted today)
If you are planning on, or already have, children a question that probably has gone through your mind is how much will it cost to send my kids to college? Well based on the above date – and if we assume current trends continue – we can make some predictions. Using the table below we can see the total cost (tuition, room, board and fees) for one year at a 4-year institution.
Year Public Private
2017 $25,290 $50,900
2022 $30,000 $58,539
2027 $36,266 $67,325
2032 $43,842 $77,429
2037 $53,000 $89,050
So using our little prediction table above, if you have a newborn at home the cost of sending them to college – assuming it's an in-state university will be over $200,000 for the 4 years. Sending them to a private university will be, on average, over 356,000! Nevertheless, things may not be a bleak as they seem. Currently, almost two-thirds of full-time students receive financial aid in the form of grants or scholarships. Even top universities, such as Tufts, report that around 40% of undergraduate students receive some form of support. For those that don't remember, grants are free money for college, often provided by the government and usually based on need (e.g. Pell grants). Scholarships are usually awarded based on merit, and can be based on academic, athletic, artistic or some other form of talent.
While many of our children will get some form of financial support, most will not receive anything close to a full scholarship. Although 3/4 of students get some sort of aid, for many, it will likely be just a few thousand dollars. So the question is how best to save for college? Fortunately, the answer for most of is simple: the 529 plan – and that's what we will be talking about next…..