If you went to college in the 1960’s you likely paid less than $5000 a year for your education, less than $2000 if you went to Harvard. Today, the rising costs of college tuition has caused an enrollment decline because 1 in 3high school graduates say they can’t afford to further their education. The average in-state tuition costs $10000 per year but when you add-in housing, food, books, and other basic living expenses, the cost is over $48000 per year. That number more than doubles for out-of-state students.
Tuition rates over the last 20 years outpaced wage increases. Costs are rising because professors, and other faculty and staff members are being paid more. Top-ranked Universities are catering to the wealthy with smaller classrooms, better dorms, and better food but the high price of luxury is contributing to decreasing enrollment rates.
Without a grant or federal aid, scholarship money, a full-ride scholarship for academics or sports, or wealthy parents willing to foot the bill, the average student will have to apply for student loans to offset the expense of college. In 2006 the nation’s student loan debt was $500 billion but today it is over $1.6 trillion and growing. Research shows it takes 21 years on average to pay off student loan debt so it’s not surprising that more than half of Americans don’t think college is worth the cost.
Parents who are planning for their child’s future should read our blog titled, “Saving For College” then call us at 800-689-3935 to speak with one of our financial advisors. We will answer any questions you have about the various college saving plan options.