The Real Cost of College Today–and How You Can Save

The cost of earning an undergraduate degree keeps getting higher—so what can you do about it?

Whether you’re planning to send a kid to college next year or you’ve got a decade to save, the time to start thinking about the cost of higher education is right now. The sooner you get your finances in order—and learn a few money-saving tricks—the better you’ll be prepared. Here’s how much college costs right now, including the hidden stuff that you won’t learn from the admissions office. We’ll also take a look at ways to slash those costs and graduate with little or no debt.

Tuition and Fees

college student

Tuition is by far the biggest cost involved in earning a degree. US News & World Report found that the average cost of attending college, including tuition and fees, has climbed sky-high in recent years. To attend a private school, the average price tag is just under $39,723 a year. At public universities, the tuition will depend on whether the student is from in-state (around $10,000) or out-of-state (just under $23,000).

Prestige universities such as Ivy League institutions can cost far more than the average public school. Although most colleges offer need-based scholarships to undergrads, in addition to any other financial aid based on the family’s income, such as Pell grants, going to college is still more expensive than ever.

Read More: The 20 Most Expensive Colleges in the United States

How can you cut back on these costs? First, high school students with the aptitude for it can take AP classes and potentially earn college credit. It’s also becoming increasingly common to do two years at a community college—the cheapest option for higher education—to take core classes before transferring to a bigger school to pursue a specialized major. Of course, attending a public university in-state will always be cheaper than out-of-state or private. If cost is a limiting factor, have a conversation with your future scholar about the financial realities of attending college before they get fixated on a pricey private school.

Your options for financial aid include need-based scholarships from individual schools, merit scholarships, Pell grants, subsidized loans, and unsubsidized or private loans. If that sounds overwhelming, the good news is that you can apply for almost all of them under one umbrella: the FAFSA, or Free Application for Student Aid. Merit scholarships may require some extra effort, including writing essays, in order to win them. It’s worthwhile to explore every possible option for scholarships before signing up for loans. Students may also qualify for a work-study program, in which they’re offered a part-time job that pays in both a cash stipend and tuition assistance.

Room and Board

college dorm room

The cost of room and board covers housing and food on campus. And by “room,” colleges mean “a tiny cinderblock space crammed with bunkbeds that always smells a little funky no matter what you do.” Okay, that’s not entirely fair; some well-funded institutions have invested in state-of-the-art dorm rooms to attract students. Many schools require non-local students to live on campus as part of the college immersion experience.

If your student plans to live on campus, it’s cheaper to choose a shared room or one that’s in a less desirable dorm. Private rooms can greatly increase your housing costs.

“Board” equals the meal plan for on-campus dining. There is a wide range of options available, from unlimited access to a set number of meals per week to boutique dining options. Keep in mind that your student might be living in a dorm room with no shared kitchen facilities, so unless they want to live on instant ramen, they’ll probably need a meal plan.

How much do room and board cost? As the Scholarship System reports, “On average, during the 2020-2021 school year, students spent $11,620 on room and board at public four-year institutions. At private nonprofit four-year colleges and universities, the average cost goes up to $13,120.”

Depending on where the college is located, it might be more cost-effective for the student to live off-campus in a shared apartment. Of course, that comes with its own set of challenges. While dorm utilities are covered by room and board costs, living independently means managing their own bills—and often splitting them with multiple roommates. There’s also the maturity factor to consider; a teenager living away from home for the first time might not have the life skills necessary to maintain a rental apartment and pay the bills on time.

Books, Supplies, and Hidden Fees

female student in glasses displeased with what she is reading on her laptop

It’s almost a cliché at this point how expensive college textbooks have become. Vox did a deep dive into why textbooks are so expensive, rising by 88 percent between 2006 and 2016. A big reason is that just four publishers control the textbook market, allowing the companies to set the prices as high as they want.

If you’re overwhelmed by the book lists on your student’s syllabus, don’t panic. First, see if you can get the books used or order them online for less than the campus bookstore. Buy books as you need them rather than picking everything up at once. It’s fairly common for professors not to use some of the materials on their lists. It’s also becoming increasingly common for textbooks to be digital, which unfortunately means that you won’t be able to get used books.

Insider reports that surprise fees are becoming more common: “At one school, students on the waiting list for a required English course that was full were told to sign up for the online version. Without a heads up, the students were charged an unexpected $250 online course fee.”

Lab fees, class materials, and other add-ons might not be included in the sticker price for tuition. Families often face hundreds of dollars in unexpected charges at the start of the semester. At that point, it’s too late to do anything except cough up the cash.

Dorm Décor, Transportation, and Other Costs

College students

Okay, you’ve figured out the budget for everything your college student will need to succeed. You’ve paid the tuition, bought the books, and signed up for a meal plan. But what about outfitting that sweet new dorm room? Many teenagers look forward to the right of passage that is decorating their first dorm, and that usually means a pricey trip to target. They’ll probably want at least a few new outfits, too, and the mandatory college sweatshirt from the gift shop.

Read More: Money 101: Essential Financial Advice for College Freshman

If the student is going to be taking a car to school, there’s the cost of gas, insurance, and a parking pass or assigned spot on campus. No car? No problem! You’ll just need to buy a bus pass or set up an Uber account with a stipend. You wouldn’t want your kid to be stuck somewhere unsafe without a ride, would you?

Options to Save for College

Child saving money in three different jars
Adobe Stock

Setting up a college fund is one of the most generous things you can do to ensure your child’s future. A 529 plan offers some very helpful tax incentives. The earnings are tax-deferred, and you won’t have to pay any taxes if the money is used for qualifying education expenses. These plans are offered on a state-by-state basis, so do your research to find the best option where you live.

When should you start saving? As Forbes explains, “Time is your greatest asset. Start saving for college as soon as possible. The sooner you start saving, the more time there’ll be for your savings to grow and the earnings to compound.” It’s like the proverb about planting trees: the best time to plant a tree was 20 years ago. The second-best time is right now.

How much should you save? That depends entirely on your financial situation. If you start saving before your child is in kindergarten, you won’t exactly know if they plan to go to a state school or a private university.

What If You’re Already in Debt?

If this article finds you too late to use the money-saving tips, then there’s at least a little light at the end of the tunnel. The student debt relief plan was recently passed by the US government, which entitles many borrowers to get $10,000 or $20,000 in student loans forgiven. While that might only be a drop in the bucket for students who attended private school or pursued post-graduate degrees, it can still make a major difference.

The brief application is now available online, and it takes literally a minute to fill out the form. The debt cancellation won’t be processed until later this year, however.

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