College, degrees and education choices. It’s a topic that I am constantly wrapped up in, I have one child about to graduate college and another one that will be heading off the college of his choice in just a couple years.
However, today I’m completely distracted by something wonderful. A friend, near and dear to my heart, is having a baby today.
But now these two worlds have collided and the combined thought in my head is, how much is college going to cost this new sweet bundle of joy?
While I can’t predict what the cost is going to be eighteen years from now when this new baby embarks on her college career, about 70% of students that graduated in 2013 had an average debt of $28,400.
Looking at tuition costs by the year, it was reported that a mid-range budget for in-state public college averaged $23,410 for the 2014-2015 year. A private college averaged $46,272.
Wherever your student chooses to go, college can be expensive. Remember, when we are discussing the cost of college we are not just talking tuition.
As you sit down to figure out the costs that could be incurred by your soon-to-be college student think about these different categories.
- Tuition and Fees – This amount can vary based on several factors such as if you are attending a school that is in or out of state, what academic program you choose and the number of credit hours taken.
Keep in mind, if your student plans on joining a fraternity or sorority there are also fees associated with joining, typically in the hundreds of dollars. If you plan on utilizing student loans consider using a student loan calculator to estimate your costs.
- Room and Board – Some colleges may require students to live on campus for their first year, but if your student has an option, will they be staying on campus in a dorm room or will you look into an off campus rental option?
There are typically a number of different food plans, with varying costs, available as well. With either option will you need to outfit an apartment or dorm room? You may need to purchase a mini fridge, microwave and all new bedding to fit whatever bed situation your student ends up with.
- Books and Supplies – As expected, there will be textbooks and potentially other course materials that are needed. Example: My daughter was a theater major and along the way had to pay for outside supplies such as make-up and material costs for costume class. Does your student need a laptop or tablet? Don’t forget about the simple things like pen and paper, they still use those items too.
- Personal Expenses – Is laundry available on campus or will your student need a hefty supply of quarters and laundry soap? Will they be eating on campus the entire time? Doubt it, they are going to need pizza money for those late night parties, I mean study sessions. Also, think about the cost of cell phone bills and any other bills such as health insurance that you may still need to cover.
- Transportation – If your student is commuting to a close by college or going out of state, there will still be transportation costs. If your student has a car think about gas money, maintenance and upkeep. They could potentially use a bike to get around campus as an alternative. If they don’t have a vehicle, will they be flying home? How many times a year? Those costs can add up quickly as well.
What’s the ROI?
Today students can expect a 14-15% return on your investment from their college education, still a sound decision. Part of the question becomes are the parents or the student paying back any debt that was incurred along the way. If the student will be paying the loans it is imperative to consider what field your student is going into and what their estimated salary may be.
Nevertheless, whatever the choice, understanding the debt that will be incurred and potential future prospects are key.
As I wrapped up my last thoughts on this article, I was informed that Baby R has safely made her way into this world. I will head off to buy her a giant stuffed frog, but I might include some seed money for a 529 savings plan, so her parents can start her college fund.
The Cost of College
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Daniel & David