- On this page:
- Most of the benefits students get from college don’t depend on the school’s price
- Future salary depends more on a student’s major than the college’s name
- There are 4 types of colleges, each with their own price range
- It's important to have a financial safety school
- Apply to a variety of college types
- Focus on graduating in 4 years
- If you must take out a loan, borrow the minimum possible
- Look into ways to reduce the cost of college
College is an investment in your child’s future. But how can you measure the value of an investment like that? And more to the point, how do you decide how much to invest?
It’s a complicated question – with no easy answers. But to provide you with a bit of perspective, we’ve brought together some of the key ideas from across the College Money Matters website and put them on this page. Please feel free to share them as part of a discussion with your college-bound son or daughter.
Most of the benefits students get from college don’t depend on the school’s price
A great education and a great experience can be had at many schools. This is not to say that all colleges provide the same level of teaching, reputation, or academic discipline. That’s certainly not the case. But when you think about it, there are probably many things your child might gain from college that have little to do with the school’s price tag. And that means they could very easily find those benefits at a reasonably priced school. See “More expensive schools? Are they better?”
Future salary depends more on a student’s major than the college’s name
There are over 4,000 accredited colleges and universities in the US. And with the exception of the most prestigious (and therefore most expensive) schools, most do not have a significant edge over any other when it comes to being hired or paid for comparable jobs after graduation. The real difference maker appears to be how well the subject in which the student majored fits the field where they’re looking to work. See “How much should I borrow for college?”, Point #3
There are 4 types of colleges, each with their own price range
When deciding where to apply, it’s helpful to know that there are four main categories of colleges to choose from. Of course, tuition and room-and-meal plan prices vary from one college to the next, and the range in prices can be extensive, but these are the current averages:
| Type of School | Average tuition + board per school year |
|---|---|
| Private college | $43,000 |
| State college (out of state residents) | $36,000 |
| State college (in-state residents) | $20,000 |
| Community college (2 year school) | $3200 (tuition only) |
Keep in mind that these average prices are for one year only. Graduating with a full degree requires 4 years of payments, or even more if it takes you longer than four years. See “Four types of colleges, four types of prices”
It's important to have a financial safety school
You probably know it’s good for any student applying to college to have an academic “safety school,” in case they don’t get accepted to their first choice. But it’s also smart to apply to at least one financial safety school – in case the costs of the schools where they were accepted turn out to be financially out of reach. See “Pro tip: Have a financial safety school”
Apply to a variety of college types
Having options is important, so College Money Matters recommends applying to the following:
- The student’s “dream school” – Even if it’s expensive, potential scholarships or grants could bring the price within an affordable range
- Several colleges that are “good fits” – academically, personally and financially
- An academic safety school – This would be a college the student is pretty sure they can get into
- A “financial safety school” – one the family knows is comfortably affordable
Focus on graduating in 4 years
Every extra year spent in college means one more year of college-related expenses – and one less year of making money on the job. Yet nearly 40% of undergraduates take longer than four years to graduate, even though there’s no real benefit in doing so. See “Every extra year in college costs more.”
If you must take out a loan, borrow the minimum possible
A great education can be had at many lower cost colleges, provided the student puts in the effort. But if parents find they need to take out loans, it's important to know what those loans will cost, and if the payments and interest will be affordable over time. College Money Matters offers a good amount of information on this subject. See “Borrowing money with student loans” and “How much should I borrow for college?”
Look into ways to reduce the cost of college
Some colleges will let students graduate early if they have accumulated enough college credits. This can save money on room and dining plan expenses, which can be between $5,000 and $6,000 a year. It can also lead to entering the workforce sooner. Here are some pathways to graduating early:
- While still in high school, a student can take college-level courses, AP courses, or the AP or CLEP exam. Note: Make sure beforehand that the courses or tests will be accepted by the college or colleges where the student plans to apply.
- While in college, taking courses for credit during the summer could enable a student to graduate earlier.
- Starting off at a community college then transferring to an accredited 4-year college can be a very cost-effective way to get an undergraduate degree. But it’s essential to be sure a sufficient number of courses taken at the community college will be accepted as credits by the school where the student plans to transfer.
See “Smart ways to keep your college costs down”
RELATED TOPICS:
How much should I borrow for college?
What do you want from college?
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