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College Planning |
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The Costs
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Getting an idea of how much you'll need is a valuable first step in any funding plan. According to the College Board, the average total bill for a year at a public college as an in-state student was $13,589 for the 2007-2008 academic year. A year at a private institution was more than twice as much: $32,307.
How Much Will It Cost?
More important than today's figures, however, is how fast these costs are growing. The College Board reports that tuition and fee increases at public colleges and universities outpaced those at private institutions. The table below illustrates how much four years of college at a public and private institution might cost down the road. The projections are based on the College Board's current average costs of college and assume a 6% annual increase in those costs.
| The Rising Cost of a Four-Year College Education |
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| Source: The College Board, based on the current average cost
of college. Illustration assumes increase in cost based on statistics
from the U.S. Dept. of Labor, Bureau of Labor Statistics. |
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| Our online calculator can help you estimate what you
might pay for college and give suggestions on a monthly contribution to help you work toward your goal.
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Evaluating Institutions from a Cost
Perspective
Particularly as a child grows older, you may want to evaluate the pros and cons of him or her attending a private school, an in-state public school or an out-of-state public school, and the cost differences involved. Tuition tends to be much higher at private universities than public colleges because private schools receive less financial support from state and local governments. Since public institutions rely heavily on state and/or local government for support, out-of-state students attending a public college generally pay higher tuition than in-state students.
| College Cost in Detail
for the 2007–2008 Academic Year |
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Four-Year Public College
(In-State Students) |
Four-Year Private |
| Tuition and Fees |
$6,185 |
$23,712 |
| Room and Board |
$7,404 |
$8,595 |
| Books and Supplies |
$988 |
$988 |
| Transportation |
$911 |
$768 |
| Other Expenses |
$1,848 |
$1,311 |
| Total Costs |
$17,336 |
$35,374 |
| Source: The College Board |
A Closer Look at College Costs
It's important to consider in advance all the expenses that a higher education might entail so you don't underestimate the costs. The table above details the basic costs today — from direct education expenses such as tuition, books and supplies to living expenses such as room, board and transportation and personal expenses such as laundry, medical needs and entertainment.
A Growing Need for Financial Discipline
Among the key questions facing most individuals when developing a college financing plan are: How much do I need to save? How much must my investments earn at a minimum to keep pace with rising college costs? Will I be able to save the amount I'll need and still meet other important financial goals, like my retirement? These questions are extremely important and should be talked over with your financial advisor.
A financial advisor can help you create a plan that can work toward your goals. If you don't already have one, call us at 1-800-896-2645 for assistance.
Investors should consider the investment objectives, risks, charges and expenses of a fund carefully before investing. Download a prospectus that contains this and other information about a fund, and read it carefully before investing.
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