A recently published study by Strada shared that Americans are confused about the cost of attending college. Specifically, many don’t understand the differences or may not even be aware of net price versus sticker price in tuition costs. As a result, 77% of Americans believe college to be unaffordable, and even overestimate the actual cost by thousands or tens of thousands. Actual college costs turn out to be much lower than what is perceived by most, with average annual tuition for an in-state public university at just over $21,000 per year.
When contemplating if college is in fact, too expensive, it’s important to look at how school costs relate to annual household income across the U.S. when determining affordability. While $21,000 which might be extremely affordable for some, it may very well be way too much for a cash strapped family.
According to the Census Bureau, median household income in the United States was $80,000 in 2023. That may seem like a lot of money, but it goes quickly. Ramsey Solutions shared that a family of four spends on average about $100,000 per year on expenses. The 20K deficit between income and expenses, implies that any cost is too much, especially when trying to figure out how to pay 21 thousand per year for college, making the prospect of higher education unaffordable.
Why We Overestimate the Costs
The media likes to shock people, and it works by getting your attention. Earlier this year headlines covered the staggering one-year, six-figure cost to attend USC (University of Southern California) for incoming students this fall. We are constantly bombarded with stats of sky-high private school tuition numbers as representative of what it costs to pursue a degree or figures that consider the total cost of attendance, which includes everything such as food and housing – a substantial addition to the final price, but only applicable to students who pay for housing, and not those who live at home.
Stories rarely mention the value of attending a community college or the savings when attending an in-state public university. We see the “sticker price” to attend private and or public colleges not the “net price,” which is the price most students actually pay after institutional grants and scholarships aid is applied; a process known as discounting.
It’s also easy to comingle in-state vs out-of-state costs, assuming all public schools are affordable when in fact many out-of-state public-school students might pay as much as some private schools. This is because out-of-state students pay a premium versus their in-state counterparts and most often are not a priority for merit-based discounting, which is typically reserved for in-state students first.
College Can be Affordable and This is How
There are ways to reduce costs and make college more affordable. The more of these cost savings tactics you do, the more money you save, hopefully bringing down the total cost of college down to an attainable level you can comfortably pay for:
Living at Home
One of the largest line items on a college bill after tuition can be housing and food plans. Living at home with parents and commuting to class can make college cost a lot less for many students. Of course, this requires that you attend a school within commuting distance. Or if you live in an area where commuting is not an option, online schools and classes have become commonplace enabling students to earn their degrees from just about anywhere. Living at home, most likely rent-free, makes for a huge cost savings when attending college.
Community College
Another way to save money is to attend a Community College for the first two-years while you get your general education classes out of the way. These classes are not normally associated with your intended major and are usually offered in most schools, including community colleges which are far less expensive than universities. Taking advantage of this lower priced way to complete these general education courses is a great way to save thousands on tuition. If you plan on transferring, check the policies of the schools where you’ll be transferring. You want to make sure you are taking the right classes, and that you are able to transfer those credits at that school.
In-State Enrollment
As mentioned earlier, the most advantageous and affordable what to obtain a 4-year degree is to attend a local state university as an in-state student paying the lower in-state tuition offered. Many states offer scholarships and grants to students who stay in-state to study, and schools will also often discount the price for it’s in-state students to encourage residents not to leave for their studies. Combine this tactic with the ability to commute and it greatly reduces the total costs of college.
Part-Time Employment
Reduced is still not free, and a great solution to cover what’s remaining is to work part-time while attending school, allowing you to pay tuition with your earnings. This will negate the necessity to borrow money or at least allow to you borrow less, reducing potential student loan debt upon graduation. Working 15-20 hours a week at $15/hour could cover a significant amount of in-state tuition. Working would also help build skill sets and establish experience that can be leveraged on your resume, once your degree is obtained.
Scholarships
Last, but not least, are scholarships. There are millions of dollars of scholarships that go unused each year. In all honestly, yes, they are hard to win, but they are there to be won if you try. It’s a lot of work and time, but if you put in the effort, it could pay off. It’s recommended you start applying in high school and don’t stop until you graduate college. Anything you win, only serves to save you money in the long run.
Managing College Cost Expectations
There’s a pervasive line of thinking that college is important, not only for the education but also for the experience. If money is tight, the traditional “college experience” might not be in your future but that doesn’t mean you are destined to miss out entirely. It’s not necessary to live on-campus to participate in college activities or attend sporting events.
Another potentially financially destructive concept is that of “dream” schools. These are those aspirational, usually very well-known schools where bragging rights are almost as important as the degree. Students get their hopes up and apply and assume if accepted they must attend, regardless of cost. Families, with the best of intentions, are willing to send students to these schools regardless of financial burden, only to realize the consequences of unnecessary debt after graduation.
With the right mindset and determination, a student can take a degree from any school and be successful. When looking at the CEO’s of 20 of the nation’s largest companies, 60% went to a public school and only one went to an Ivy. A brand name school paired with a moderately or unmotivated student is worthless. It’s you the student, not the school that will determine how successful you are in life. Don’t buy into the brand name hype – it’s too expensive.
While the perception of college costs often feels unaffordable, the reality is more nuanced. Many Americans mistakenly overestimate tuition prices, influenced by sensationalized reports and confusion between sticker prices and net prices. Understanding the true cost of attendance, factoring in opportunities like in-state tuition, community colleges, and institutional aid, is important in assessing affordability.
By approaching college costs with careful planning and informed decision-making, achieving a degree is possible for many, even when finances are tight. The path to higher education may not be simple or traditional, but it can be tailored to meet your individual needs and resources.