Like everything else, college costs are going up. According to recently released figures, students or their families will pay from $175 to $1100 more this year than last. Still, there is good news. The amount of financial aid available is now almost $170 Billion. In spite of the increases, a college education still remains affordable for most students and their families.
Even though some of the college costs so often mentioned in the news – $36,000 to $50,000 per year for tuition and fees at premier 4 year schools, college is actually more affordable than that. For example, over half of students attend four year schools with tuition and fees below $9,000? When grants are taken into consideration, the net price drops way below the published “sticker price”. Other forms of financial aid drop the out of pocket costs even further.
The College Board has published these figures for the 2009-2010 academic year:
Private four year – $26,273 (up 4.4 percent)
Public four year – $7,020 (up 6.5 percent)
Public two year – $2,544 (up 7.3 percent)
Room and Board will cost $377 to $420 more than last year
The average out of state surcharge for full time students at a public four year institution is $11,528
One of the vehicles to save ahead for future college costs is a 529 college savings program, which allows you to save for college through a state sponsored investment account. Earnings and funds can be used at any school, in any state. Earnings and withdrawals are federal tax free, and funds are treated as parental assets when calculating need figures. There is also a variation which is a tuition prepayment plan which allows you to lock in tuition cost at a particular school
There are other vehicles such as Coverdell savings accounts or Roth IRAs which could be utilized for college savings. There are also cost free sources of money for college – scholarships, of which there are many, and another under publicized vehicle which you can find by following the links below.