Planning for College
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The cost of college continues to
grow. In 2006/2007 there was a 6.3% increase in the average annual cost of
a four-year public university. In the five years preceding, college costs
rose 7% per year compared to inflation at 2.8% per year. The government
has responded with numerous tax-advantaged programs in the form of deductions
and credits and in the creation of 529 Plans.
Additionally, academic institutions have a myriad of financial aid
opportunities. |
College Facts for
2006/2007
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Average annual four-year
private college tuition and fees is $22,218 (a 5.9% increase). |
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Average annual four-year
public college tuition and fees is $5,836 (a 6.3% increase). |
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Average annual two-year
public college tuition and fees is $2,272 (a 4.1% increase). |
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The average annual surcharge
for out-of-state tuition is $9,937 at a four-year public
college. |
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With room, board, books,
supplies, transportation and miscellaneous costs added in, the annual
cost is $16,357 for a four-year public college that
includes $6,960 for room and board, $942 for books and supplies, 880 for
transportation and $1,739 for other. |
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$134.8 billion in financial
aid is available (a 3.7% increase). Net average annual
tuition and fees after financial aid are surprisingly affordable at $13,218
at a four-year private college, $2,736 at a four-year public college
and only $72 at a two-year public college. |
Other Facts
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Only 15% graduate in four
years or less. |
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43% do not finish in five
years. |
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Of parents saving for
college, 52% use savings accounts, 29% use savings bonds and less than 25%
use 529 plans (Fidelity Investments Poll 10/3/06). |
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Over a lifetime, the earnings
gap between a high school diploma and a college degree can be more than
$1,000,000. |
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Honest but foolish news --
17% of parents didn't even think about saving for college until their
children were between 16 - 20 years old (John Hancock Survey 5/17/07). |
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Good news -- 21% of
grandparents with grandchildren age 21 and under are setting aside funds for
college (Met Life Grandparents Poll 6/16/06). |
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