- Life & Money
- Family & Work
- Your Family
- Amanda Reaume
- Jun 15, 2022
Average Cost of College
Average tuition for college
How much will college cost? If you currently have a child and are wondering about the average cost of tuition, consider that with inflation, college costs for your child could hit six figures by the time they graduate high school. Let's look at what the average tuition for college could look like.
How much does 4 years of college cost?
First, let's look at current average tuition costs. The average college cost of tuition, fees, books, room and board for 2021 to 2022 was $27,330 for one year as an in-state student at a state school and $55,800 for a private college, according to College Board. That adds up to $109,320 for four years at a state school and $223,200 at a private college, not including hikes that could happen during that time.
How has the average cost of college changed over time?
When trying to determine how much to save for the cost of college tuition, however, assume that tuition will cost 5 percent more per year, which is about how much tuition costs have increased annually over the last 10 years.
How much will college cost in 5 years?
How much will college cost in the future? If that trend continues, that means that in five years, the average cost of a bachelor’s degree will be $150,341 at a state school and $306,952 at a private school. Since many students now take more than four years to graduate, that could further increase the costs.
What will the average cost of a bachelor's degree be in 10 or 15 years?
If you currently have an 8-year-old son or daughter, his or her college costs will be even higher: $191,878 at a state school or $391,757 at a private college. And if you have a toddler who won’t be attending school for another 15 years? Be ready to pay $244,889 for a state school or a whopping $499,992 for a private college.
Other factors affecting average tuition over time
Of course, a number of factors could slow the rise of college costs over time. After the move to distance learning in the wake of COVID-19, there is the possibility that many colleges may offer a combination of on-campus and online classes in the future, which could have a lasting impact on tuition and room and board costs.
Saving for the average cost of a bachelor’s degree
But it’s better to be prepared. The key to saving for college is to start as early as possible, since compound interest will help your money go further. A 529 plan, which lets you save for college in a tax-advantaged account, is one place you can put college savings.
There are also non-traditional ways to save for your children’s schooling, such as buying permanent life insurance policies and utilizing the accrued cash value to pay for college costs. Since the money isn’t earmarked for school, there are no penalties if you don’t use it all for college, as is the case with 529 plans, on which you’ll pay a 10 percent penalty on any money you withdraw that aren’t used for college costs.
One note of caution: Make sure you’re planning for your own financial future before you start saving for college. It’s important to have an emergency fund built up, to get the proper insurance in place for protection, and to be on track for retirement before you ramp up saving for your kids’ college funds.
Northwestern Mutual Investment Services, LLC (NMIS) (securities), subsidiary of NM, registered investment adviser, broker-dealer, member FINRA and SIPC. All investments carry some level of risk including the potential loss of principal invested.
Utilizing the cash values through policy loans, surrenders, or cash withdrawals will reduce the death benefit; and may necessitate greater outlay than anticipated and/or result in an unexpected taxable event.
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