HOW MUCH WILL COLLEGE COST?

I recently asked my ten-year-old niece, “How much does college cost?”  Her answer was, "I don't know.  Like...$5 million?"

I have asked friends who have two-year olds, “How much do you think college will cost when these kids finish high school?”  Their reply, “I don’t want to think about it.” 

Parents of high school students can think back to a time when a semester’s tuition set them back about $700. 

 

So then, how much will college cost?

We recently completed a study projecting estimated tuition costs for four groups of students: Those graduating high school in 2015, 2019, 2023 and 2027.  We included five different college options: In-state, west coast public, east coast public, private and Ivy League.  We focused our research on the tuition expense alone because room and board and other extra expenses are more variable. 

If current tuition rates continue to climb at their recent averages, all five options will demand $300,000+ in just tuition over four years for the high school class of 2027.  Many families start saving for college late; too late.  Some don’t save at all.  With current tuition trends a family with a two-year-old who wishes to start saving for college will have to part with and invest $1,000 a month for the next sixteen years to meet the cost of attendance for a moderately priced in-state university.  A family with 10-year-old twins would need to invest nearly $6,000 a month to pay for private college tuitions in eight years. 

For years staying close to home to study at an in-state university was relatively affordable, but now with a slow-to-recover local economy, hiking in-state tuition numbers put higher education out of reach for many bright students.  

What happens next?  Many colleges, when asked, will say that many of their students do not pay full tuition, and are supplemented with scholarships, grants and other financial aid.  But there are no such promises in the world of financial aid.  Ask someone who graduated college in 2005 if their college campus "looks the same." Most will proudly boast, "No, you should see it now!"  Many colleges, to entice more students to apply, built fancy workout centers, high rise dorms with suites, giant lab complexes and professional grade athletic facilities.  The ability for these institutions to continue to raise money to support these recent additions has faded.  So, the remaining revenue source that schools can control is tuition and student fees.  My belief is that the education and experience the colleges provide is very valuable.  Certain on-campus expenses, such as athletic budgets and construction costs, must be reigned in to manage costs so that the tuition number doesn't scare prospective students and their parents away from the onset of their college search.  Kind of like the airline industry, the colleges tend to move their pricing alongside their competitors.  Now the competition may no longer be the college down the road, but the eyes of a father and son, or mother and daughter, nervously calculating forward that five-figure number listed under tuition in the guidebooks.

Today I wrote my 10-year-old niece a check for $12 for Girl Scout Cookies.  When she heads off to college in eight years that should cover four minutes of her economics class. 

4-year Tuition Projected	HS Class 2015	HS Class 2019	HS Class 2023	HS Class 2027
In-State Public	$70,891.00	$117,729.00	$195,512.00	$324,685.00
Out of State Public East	$157,783.00	$200,705.00	$255,303.00	$324,753.00
Out of State Public West	$154,571.00	$202,422.00	$265,086.00	$347,150.00
Ivy League	$207,645.00	$244,318.00	$287,470.00	$338,244.00
Private	$208,298.00	$248,399.00	$296,221.00	$353,249.00