College fees are higher than ever, and the expenses are only rising. Not only is it costly, but it can also be challenging to determine how much you’ll need to save. Every college charges a different price for tuition and other school fees. But there’s an even bigger problem, students at the same school have varying fees to attend because some have scholarships, need-based grants, or other incentives.
Those factors make it hard for any parent or family to plan, and most won’t see the final first year’s fees until their kids have already enrolled. Parents don’t have much to rely on. Families hire a professional to help them see where their earnings are going, cut back on unnecessary expenses, and maximize their savings.
Besides hiring professionals to help manage finances, it pays to know the average college costs before letting your child enroll. Here are some typical college fees, according to the College Board, how much you should save, and how you can save more.
The College Board is an American not-for-profit organization that provides nationwide net average expenses to college students. From the recent 2018 to 2019 academic school years, College Board data show that the average tuition and other school fees for private four-year colleges were over $35,000. In the past decade, the costs have risen by 2% per year.
In contrast, the average total costs for a public four-year college in the same year were over $10,000, which also increased in the past decade by 3% annually.
Bear in mind that these are average costs. It’s best to know which college your kid is considering to help you get a more accurate estimate using the school’s online Net Price Calculator. Each college has this tool, helping you have a better estimation based on your financial data.
How Much Should You Save?
Following the examples above, the estimated yearly all-in expenses for a private school with a 2% increase in fees require you to invest around $92,000 following the lump sum you would need to invest today to cover the whole 4-year duration of private education. For public colleges with a rough 3% inflation rate per year, you will need to save at least $29,400 today.
These estimations are made under the assumption that you’ve not invested any money beyond the initial lump sum. These costs cover four years of public and private colleges, minus the room or board expenses.
How to Cut Costs?
If you think you can’t afford either college fees out-of-pocket, there are several ways you can cut costs. These include:
- Let your child live at home and commute to school. Doing this can help you save a lot of money as the average expenses for room and board in school is around $10,00 for public educational institutions, $12,000 for private schools, and $8,000 for community colleges.
- Apply for Free Application for Federal Student Aid (FAFSA) forms to make your child eligible for grants, reducing costs.
- Open a 529 plan to help you tuck away as much as you can for college fees.
- Get a reasonable loan to save more.
College isn’t cheap. It’s best to combine savings, income, and financial aid to help you cover these costs without having to sacrifice your quality of life or sending your child to a college they don’t like.