Is college worth it? That question may seem far-fetched, but more people are asking it as the cost of college has skyrocketed. The average cost of college has risen close with annual growth rate of 9% over the past 20 years according to the Education Data Initiative.
The Choice of Community College
Much of Gen-Z feel that a high school education is “all you need to ensure financial security” writes Paul Tough in the New York Times magazine. But there is another road that many high school graduates are taking — community colleges. These are two-year institutions that often offer a wide range of courses, and many younger students can stay home. For public community colleges, the average tuition is approximately $5,000 per year for in-state students.
The Dollar Advantage of College
Despite the feeling among many younger people that a high school diploma is all that is needed, college graduates, on average, make $1.2 million more over their lifetime. Many believe, and backed by data, that incurring a calculated amount of student debt while seeking a marketable degree that could lead to a well-compensated profession may pay off, but that’s still a risky endeavor.
For parents planning for college, it may be helpful to know that prices vary depending on the type of institution and its location, according to the College Board. One price doesn’t fit all. The average 2022-23 public four-year in-state tuition and fees range from $6,370 in Florida and $6,440 in Wyoming to $17,020 in New Hampshire and $17,650 in Vermont. Of course, no one is suggesting you pack up the family and move to a state based on your ideal price point.
About 78% of families said they eliminated a college from consideration at some point in their research and application process due to cost, according to the 2023 Sallie Mae Survey How America Pays for College. But many higher education experts recommend that prospective students look beyond published prices, since the tuition listed may not be the actual amount they’ll pay after financial aid and institutional grants, according to Emma Kerr and Sarah Wood of the US News and World Report.
Many parents will have to borrow and will often look for a loan that offers the lowest interest rate, but there are other considerations that go beyond interest rates. It could mean choosing a product that might not be the cheapest alternative right now, but the long-term outlook could offer you more flexibility.
As always, if you have more questions about where and when to start saving for college, your options with community college and how financial aid fits into your future college plans, speak with a Barnum financial professional. Get yourself on the right track today!