There’s almost nothing talked about more in higher education than the cost of college. The cost of a college degree increased 1,120% between 1978 and 2012 – four times faster than the increase of the consumer price index. And as college tuition rises, so does student debt. Today, graduates in the U.S. hold a total of $1.23 trillion in student loans among 43.3 million borrowers. The class of 2016 graduated with an average of $37,172 in student debt.
But what exactly makes up those high costs and large debt loads? Although tuition and fees are a large portion of it, those aren’t the only expenses a student incurs when he or she goes to college. Below, GoodCall takes a look at just how much it really costs to go to college – from application fees to tuition to living expenses and more.
It’s no secret that tuition makes up the bulk of the financial burden of college. Today, yearly tuition costs have reached an average of $32,405 for a private, non-profit four-year college, $23,890 and $9,410 for public four-year colleges (for out-of-state and in-state students, respectively), and $3,440 for public two-year colleges.
And those costs have risen significantly in the past 10 years. Perhaps surprisingly, in-state tuition at public colleges has increased the most, with a 34.8% increase between the 2005-2006 academic year and the 2015-2016 academic year. That’s followed by 26.3% for public two-year colleges and 23.9% for private, non-profit four-year colleges.
Moreover, high college costs are not unique to one particular region or part of the country. College tuition is on the rise nearly everywhere (in fact, the only state that has seen a decline in in-state tuition at public four-year colleges in the past five years is Maine). Louisiana has seen by far the highest five-year increase, at 52%, followed by Georgia at 31% and Tennessee at 30%. Click on each state below to see its 2015-2016 tuition, as well as its five-year percent change.
However, tuition isn’t the only expense when it comes to a college education. One additional expense, unexpected for many families, occurs before a student even gets to school – application fees. And while individual application fees usually aren’t prohibitively expensive, if you apply to enough schools, they can add up quickly.
Financial and higher education journalist Donna Fuscaldo provided GoodCall with a breakdown of application fees, as well as some helpful tips for keeping application costs low:
“While plunking down $40 or $50 to apply for college doesn’t seem like a lot, cast your net wide enough and apply to multiple schools, and the expense can quickly add up.
Consider this: According to the National Association of College Admission Counseling, 32 percent of freshmen entering college in the fall of 2013 completed seven or more applications, up 10 percent from 2008. What’s more, the survey found that for ten of the past 15 years, more than 70 percent of colleges reported an increase in applications year-over-year.
In other words, a lot of students are applying to a lot of schools. And that means they’re spending a lot on applications.
Application fees should be part of your school analysis
The cost to apply to a school shouldn’t be the main reason to skip one university or college, but knowing which schools charge the most for an application fee can help with your decision. If every school your child is applying for has expensive application fees, it may be worthwhile to look at alternatives. U.S. News & World Report recently ranked the schools with the most expensive application fees, and found that the average fee was $41 in the spring of 2015, with many schools charging $50. However, there are outliers charging close to $100 just to apply.
Stanford University in California charges the most, at $90 to apply, with Columbia University in New York City and Duke University in North Carolina tied for the second spot with an application fee of $85. Rounding out the top five is Boston University and Dartmouth College in New Hampshire, which both charge $80 for an application fee. In fact, all of the top ten charge anywhere from $90 to $75 to apply. If a student is applying to seven schools, that can add up to somewhere between $525 and $630 – not an insignificant cost.
U.S. News & World Report’s full rankings of application costs, along with any U.S. News & World Report college rankings, are below:
How to lower or avoid application fees
Application fees alone can make the cost of attending college prohibitive for some. After all, you can’t get financial aid until you apply and are accepted at a school – and even if you had the aid, it doesn’t cover the fees to apply. However, there are ways to get around the high costs to apply to certain colleges.
According to U.S. News & World Report, applying online can lower the cost to zero in some cases. That’s because a lot of schools let you apply online for free. Some of these include Upper Iowa University, Millikin University, Juniata College, Kettering University, York College of Pennsylvania, Drake University, Smith College, Barry University, and Mercyhurst College.
In addition to applying online, some groups also offer college application waivers that can save students money. This includes the CollegeBoard. Every income-eligible senior who takes the SAT or SAT subject test using a fee waiver will also get four college application fee waivers from the CollegeBoard, which can be used to apply to 2,000 participating schools around the country.
Meanwhile, the National Association for College Admission Counseling, or NACAC, has an application fee waiver program for students applying for college for the first time who have limited financial resources. In order to receive the waiver, students must have received or be eligible to receive an ACT or SAT testing fee waiver, and be enrolled or eligible for the Federal Free or Reduced Price Lunch program.
Who you know can also help you get application fees waived. According to the U.S. News & World Report study, some schools waive fees for friends or relatives of graduates, while others will waive your application fee if you visit the campus in person.”
Another major cost to consider when it comes to attending college? Living expenses. At many schools, room and board is rolled up into the final cost estimate (though it is not, it should be noted, included in our analysis of tuition costs above). When room and board is added to tuition and fees, the overall cost of attending college increases significantly:
Moreover, room and board costs have been increasing along with tuition costs. The graph below shows average room and board costs at all institutions from 1976-1977 to 2009-2010:
Today, room and board costs an average of $11,516 at private, non-profit four-year colleges and $10,138 at public four-year colleges. Room and board alone more than doubles the cost of attending a public four-year college in-state, bringing it from $9,410 to $19,548; at a private school, it brings the average total cost from $32,405 to $43,921.
And of course, there are expenses to consider in addition to room and board. Terri Williams, a GoodCall writer and financial, career and business journalist, details a few of the additional expenses students and families should consider when calculating the overall cost of college:
“While tuition is a mammoth college-related expense, it’s not the only one. GoodCall spoke to an expert in this area to find out what other expenses students and parents should be aware of.
Stephen Black, Senior Consultant at Admissionado, a boutique college admissions consulting firm, supplied the following list of nine costs that he says are important to be aware of, especially since many of them are not covered by scholarships, grants, or loans.
Dorm Room Amenities: Sometimes it’s a surprise to walk into an empty dorm room to see a couple of twin beds, maybe a desk…and that’s it. You and your roommates will often want to supplement this furniture (or lack thereof) with a futon, a couch or chairs, and a TV with stand.
Books: This is an obvious expense, but what’s less obvious is exactly how expensive textbooks can be. It’s not unusual to pay a couple hundred dollars for a huge textbook or an out-of-print edition of a centuries-old novel. Often, libraries will keep books like this on reserve, but they’re usually in high demand. According to recent studies, the average student spends roughly $1,200 a year on textbooks and supplies for their classes.
Transportation: If your school is in a city, you’ll probably need to use public transit — buses, subways, and trains. If you’re in the middle of nowhere, you might need a car, and all the expenses that incurs – like gas, car insurance and maintenance. The biggest expense is traveling home, especially if air travel comes into the picture.
Food: Although food is included in room and board at most colleges, many colleges only offer meal plans for certain meals or at certain times of day. It’s almost guaranteed that you’ll need additional funds for going out, eating out, or just groceries to keep in your room.
Leisure: Sometimes, you need to treat yourself. Make sure to budget for social activities and events, whether it’s concerts, movies or just a night out now and then.
Rent: Some colleges guarantee four years of on-campus housing, but many schools do not. This means you may have to pay rent, which can vary drastically based on the location of your school. If you’re in a big city like Manhattan, you’ll likely need to take into account extra costs, like broker fees.
Clothes: This expense can be significant, especially if you’re going to school somewhere that has a contrasting climate to your home. If you’re at school in Hanover, New Hampshire but hail from San Diego, you might be surprised at how expensive good snow boots and a sturdy winter coat are. If you’re making the reverse trip, you’ll need to invest in summer clothes.
Job/internship: The costs here mainly come from the search. You’ll want to get a nice interview outfit, and you may also need to travel to interviews. If you land an unpaid internship that’s in a big city, you’ll have to factor in significantly higher expenses – like rent, transportation, and food.
Graduate exams: This is an expense that can really sneak up on you. Registration fees alone can be hundreds of dollars per exam, and let’s say you take the test – whether it’s the GMAT, LSAT, MCAT, or GRET – and you’re not happy with your score. You may want to factor in the costs of a tutor or online classes.”
Time in School
The time you spend in school can also drive up the total cost of your degree. Most estimates – for tuition, room and board and other expenses – assume four years in college, the time most students expect to spend getting a bachelor’s degree. However, the reality is that many students end up spending far longer in school – and that means they spend more money, too.
According to the National Center for Education Statistics‘ most recent data, only 39.4% of first-time undergraduate students at four-year colleges actually graduate in four years, and 59% graduate in six years. GoodCall writer Candace Talmadge takes a closer look at what those extra years in school can cost you:
“As high school juniors begin the college admissions process, experts say students and their parents should think first about their career aspirations and then their preferred major before ever applying to an institution, because their choices in these areas can impact the total cost of a degree by tens of thousands of dollars.
‘Looking at college first and then a major is an outdated approach,’ said Juliet Jones, vice president of Career Key, Inc. ‘It’s left over from an earlier time when college didn’t cost that much and changing majors or even schools was a lot easier. One of the most costly mistakes is changing schools.’
Only 39.4 percent of first-time undergraduate students at four-year colleges graduate in four years, and 59 percent gradate in six, according to the National Center for Education Statistics. Jones says studies show that students pursuing a bachelor’s degree who take longer to graduate because they change majors, schools, or drop out lose an average of $46,000 in earnings for every year they are sidelined from the workforce.
Moreover, those who change majors or colleges spend tens of thousands of extra dollars on tuition and other college living expenses, points out Mike McCormack, author of Career First College Second and president of PeopleRightCareers. ‘People make a huge college investment based on very little information in many cases.’
Finding the right college – and major
Before scoping out future alma maters, students should get to know their personalities and interests. According to Jones, research supports the theory that students who choose majors that fit their personality type are more likely to earn good grades and be successful in college, and also land in a workplace that also suits them, contributing again to greater chances of success.
McCormack says that in addition to evaluating personality and interests, high school juniors should also take tests that measure their skills, aptitudes, and cognitive abilities, and that point them to work environments that best fit them overall.
‘Colleges are not geared for, nor are they very good at, helping students figure out what they are going to do with the rest of their lives,’ he emphasizes.
Both Jones and McCormack describe this decision as a process that takes time and thought, but one that is essential to being able to choose the college or university that best serves a student’s individual needs. It also provides the best possible chance of graduating in four years with a degree – and avoiding the added expense of changing majors or, even more difficult, colleges.
McCormack adds that high school students are usually not mature enough to handle this process on their own, and that parents should be involved to lend insight and direction while allowing their children to make their own choices.
Once a teen has an idea of the career(s) that interest them, Jones and McCormack urge further research. McCormack recommends that students network with members of the field or profession they’re interested in to find out what types of majors lead to these types of jobs. Jones points out that many careers combine artistic or linguistic talents with STEM (science, technology, engineering, mathematics), such as computer-aided design.
‘There are other options than starving artist,’ she continued. ‘You can be practical and true to yourself, but you must do the self-exploration first.'”
And how are students paying for all these expenses? More and more frequently, the answer is student loans.
Total student loan debt has been on the rise for many years, and shows no signs of slowing down. According to Marketwatch, the total student loan debt in the U.S. – that $1.23 trillion number – goes up $2,726.27 every second. The chart below shows total student loan debt from 2006 to 2016:
Average student loan debt per student has also increased, with each graduating class borrowing more than the last for the past several years. The chart below shows the 10-year percent change for average student debt from 2004 to 2014, versus the 10-year percent change for inflation and median weekly wages during the same time period.
For context, the average student debt was $18,550 in 2004 and $28,950 in 2014, according to the Institute for College Access and Success. According to other estimates, that number jumped to more than $35,000 in 2015, and more than $37,000 in 2016.
When a student goes into debt to pay for college, the cost ends up being much more than the actual loan balance (in fact, on an average $28,950 student loan, a borrower can end up paying back nearly $40,000 with interest). According to recent GoodCall analysis, just that average student loan debt can cost borrowers 5 extra years to home ownership and $500,000 in lost retirement savings – not to mention a luxury car, dozens of missed vacations, and half a child’s college savings.
Is it Worth It?
College is expensive – prohibitively so for some students. But that’s not to say it isn’t worth it. As studies show, college degrees still lead to greater employment opportunities, higher wages, and even, some say, better health.
However, it’s important to consider the return on investment you’re getting – or are likely to get – from your education. And that’s an issue a lot of experts in the higher education space are considering right now, too.
According to a recent Gallup report, only half of college students feel strongly that their education was worth the cost. Recent college graduates were less likely to think their education was worth it, as were graduates of for-profit colleges.
Ultimately, it’s up to individual students and their families to determine how much they can and want to spend on college, and to ensure they’re getting a return on their investment. However, there are many ways to lower the cost of college, from federal financial aid to scholarships to simple budgeting. And, until something changes in the world of higher education, students and families are going to have to continue to rely on these resources to help pay for college and keep student debt at a minimum.