Think a college education is expensive now? In eighteen years, it could cost more than $120,000 annually for a private school education and $54,000 for a public school education.
That’s according to an investment firm, Vanguard, that claimed tuition has risen around 6 percent each year. If that rate continues, those born today will pay a lot more for a college education when they turn 18.
That’s pretty shocking given the cost of a college education today is out of the reach of many. According to our average college cost statistics, a year at a state college will cost resident students around $9,650 while out-of-state students will pay $24,930 for a public school. A private college or university will set you back $33,480 on average. Keep in mind that this doesn’t take into account books, room and board, fees, and living expenses. Taking into account the projected increase to $120,000 or $54,000 for college educations, eighteen years of college is going to cost more than many home purchases. Add more kids into the mix, and affording college will become virtually impossible for a majority of families in the United States.
“When you look at these numbers and how college has increased from an inflation standpoint historically, it is staggering,” said Maria Bruno, a senior investment strategist at Vanguard. In order for parents to cover just 50 percent of the college costs in eighteen years they would have to set aside and invest $1,000 per month for the next seventeen years for a private school and $320 a month for a public school. If a community college is in the cards, Bruno said that families would need to put away $147 a month.
Putting aside that much money can be a big burden for families, particularly ones with newborns. After all, the cost of raising a child is on the rise, making saving for college and, in many cases, retirement a non-option. It doesn’t help that a lot of these new parents are dealing with their own student loans. There is some good news for parents just starting out. Jennifer Ma, a senior policy research scientist at the College Board, said in the tuition report that around 70 percent of college students get some form of grant or scholarship that lowers the amount they have to pay. What’s more, she doesn’t think tuition will continue to rise at 6 percent annually. “These days, colleges and universities have an enormous amount of pressure to minimize costs and control tuition increases, more so than in the past than 20 to 30 years,” Ma said in the report.
Author: Andrew Rombach
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