Before I went to college, many, many years ago, my family and I had to look at whether or not it was affordable. We looked at in-state tuition, out-of-state tuition, private versus state school costs, room and board costs, and what the school offered in return (by the way, saving for college began while I was still in Little League). We found that it was possible for a middle class family to afford an out-of-state school and avoid any debt.
Is that still possible? Can an average American family afford to send one of their high school graduates to college without going into debt? Based on some quick research, it may not be as readily done as in years past. It cost roughly double in terms of percentage of median household income in 2008 than in 1966 (I used 2008 since that is the available data) for an out-of-state school. Tuition costs have increased more than inflation over the last decade, and we’ve all seen college costs rising every year longer than that (don’t ask why because I’m not sure either).
So, how are we sending more students to college than ever before? The answer is – a combination of loans, grants and scholarships. Is it worth it? You have to make that decision for yourself, but U.S. Census Bureau statistics show that more education relates directly to higher income. For example, in 2003 (again using available data) a high school graduate earned an average of $37,109 in household income, an associate degree resulted in $51,934, and a Bachelor’s degree saw $66,997 in household income (these figures are for overall earnings and not just recent grads).
Do you want to go to college but you’re just not sure how you’re going to manage financially? Start by saving early (such as 529 plans), try to get as many scholarships and either government or private grants as you can, and if you still need additional money, consider private student loans.
For those who need them, UKFCU offers Student Loans.