Where We Stand: College Costs
RISING COLLEGE COSTS have become a major source of concern. How much might your family pay—and what’s the potential payoff? Consider some numbers:
- According to the College Board, it costs an average $20,770 in tuition, fees, room and board to send a child to an in-state university for the 2017–18 academic year. Even after subtracting out the inflation rate, that’s 1.3% higher than the year before and up a cumulative 30.4% over the prior 10 years.
- For a private college, the average tab for 2017–18 is $46,950, a 1.7% increase from a year earlier and up 24.9% over the preceding 10 years. Again, these are increases over and above inflation. Sound steep? At some elite private colleges, the cost is now more than $65,000.
- Some have contended the real cost hasn’t climbed nearly as fast as the sticker price, thanks to financial aid. Still, as published college costs have increased, so too have education loans. Figures from the Federal Reserve Bank of New York show education borrowing up 143% over the 10 years through March 2018.
- According to the College Board, 60% of students graduating from public and private nonprofit colleges during the 2015–16 academic year had borrowed to pay their education costs. The average amount borrowed was $28,400. Among the different types of financial assistance to undergraduates and graduates during the 2016–2017 academic year, government, college and other grants accounted for 50%, federal loans 37.8%, education tax breaks 7.1%, nonfederal loans 4.6% and work study 0.4%.
- How much debt do college students graduate with? Check out this interactive map, which allows you to look at averages by state and by individual colleges.
- For undergraduates who take out federal loans during the 2018–19 academic year, the interest rate is 5.05%, up from 4.45% the year before.
- It isn’t just undergraduate borrowing that is increasing. A March 2014 report from the New America Foundation estimated that 40% of the student loans outstanding represented borrowing by students pursuing graduate and professional degrees.
- All this student debt is hurting young adults’ ability to achieve other goals. Among those 18 to 30 years old, 40% had student debt in 2015, up from 27% in 2005, according to a study by researchers at the Federal Reserve Bank of Cleveland. For these borrowers, the debt burden is staggering, with student loan payments devouring more than 20% of their income in 2015. One result: These young adults are finding it harder to buy a home. The Cleveland Fed researchers found that just 7% of those age 18 to 30 own a home, down from 11% a decade earlier.
- What are families doing to prepare for college costs? A 2015 study by market researcher Ipsos Public Affairs and student-loan provider Sallie Mae found that 48% of parents with children under age 18 were currently saving for college, and the total amount socked away averaged $10,040.
- Is a college degree worth the cost? According to a June 2014 White House report, the median annual income in 2013 for those with at least a bachelor’s degree was $62,300. That was $28,300 higher than the median earnings for those with only a high school diploma. These figures are for folks age 25 and older who are working fulltime. College graduates were also less likely to be unemployed, at 4%, versus 8% for those who only graduated high school. Want additional details? Check out collegescorecard.ed.gov, where you can get information about a college’s annual cost, graduation rates and the salaries earned by graduates.
- The earnings for those with advanced degrees, especially lawyers and MBAs, are even higher. A 2012 Census Bureau study estimates that, relative to high school graduates, a bachelor’s degree boosted lifetime earnings by 77%, a master’s degree by 107%, a doctorate by 157% and a professional degree by 203%. Among those with a bachelor’s, engineering majors were likely to have the highest lifetime earnings, while education majors should expect the lowest incomes. The big payoff from a college education is also most likely to be enjoyed by students who go to prestigious private colleges, while those who attend community colleges and technical schools fare less well.
- Want to see more stats? Check out the slew of numbers compiled by StudentLoanHero.com.
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