Attending college shouldn’t be the default option for every graduating high school student anymore; instead, it should be a carefully, well-thought-out plan, especially when you consider the high cost. In 2023, the average cost of attending a 4-year in-state university is about $25,707 per year. For out of state or private universities, that amount only goes up. In New Hampshire, the average undergraduate tuition and fees is $10,092 for in-state students and $27,538 for out-of-state students. That is a 4.54 percent increase compared to the previous year.
In some cases, college is a worthwhile investment that paves the way for successful, lifelong careers. But in others, college can be an extremely expensive decision that hinders a young person just starting out.
If you or your child is planning on attending college, it’s important to be fully aware of the expenses – and how to manage them – beforehand.
The Rising Cost of College
According to the US Bureau of Labor Statistics, college tuition increased by more than 160 percent between January 2000 and June 2022.
Some of that cost can be attributed to general rising prices and inflation, but there’s more to it than that.
For example, over time, colleges began to offer more services for students beyond just education. Today, many colleges and universities provide more robust academic advising, healthcare options, transportation, food and housing services and mental health support.
Also, as technology changes, there is a greater demand for updated technology on campus, and more educated professors to keep up.
Those factors, combined with changes in state and local funding over time, have lead to even steeper increases in higher education costs.
Weighing Your Options
Choosing the right school is a major decision. Oftentimes, students push to go to their “stretch” school, but that might not be the best fit. Just because one school was harder to get into, doesn’t mean it would be a better fit for that student. The best option is usually a college that has the right combination of academics, personal fit and cost.
Knowing how high the cost of college is, many students are opting for alternate paths, like trade school, community college, or a more affordable 4-year institution.
Across the nation, undergraduate college enrollment dropped 8 percent from 2019 to 2022, according to the National Student Clearinghouse. The pandemic certainly had an impact on students attending college, but time will tell if it affected higher education enrollment for good.
But if you or your student wants to attend a four year university, there are still plenty of options to help offset the cost.
How to Pay for College
According to the National Center for Education Statistics, about 87 percent of first year undergraduate students received some form of financial aid, whether it was scholarships, grants or loans.
It also helps that there are more online resources than ever before dedicated to helping students find grants, scholarships and other aid sources that they might be eligible for. FastWeb and Scholarships.com are a couple sites that can help.If you have more time to save, 529 plans are an excellent savings vehicle for higher education. In fact, they became even more flexible recently, thanks to the Secure Act 2.0. Effective 2024, qualified leftover 529 account funds can be transferred to a Roth IRA without incurring taxes or penalties, or hitting an income limit.
Do you need help planning for your financial future? Contact me today to set up a meeting to talk about your goals.