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PROJECTING COLLEGE COSTS

Perhaps since college expenses are behind you, you feel you can relax.  Not so!  If you have children or grandchildren, be prepared for a major shock. 

Education expenses have risen at an average rate of 8.4% for the past ten years.  Some institutions have already announced increases for the next school year ranging from 6.25% to 11.5%.  Let us hope it stays at a lower rate. 

Expenses range widely from one institution to another.  However, the total costs must include tuition and fees, but also books (ranging from $25 to $75 per class for each semester or quarter) room, board, incidental expenses and transportation. 

At the absolute low end of the scale, a student might attend a local college that eliminates room expenses and reduces board and transportation.  Unless the student lives next door, there is still transportation expense to commute. 

Costs for a single school year ranged from a low of $9,070 to nearly $25,580 per year.  For an out of town school, the average might be substantially higher, which could be reduced by $2,000 to $3,000 per year by student summer earnings. 

The following chart will help you calculate costs.  To serve as an example, we have shown costs for a five-year-old, who would be starting college thirteen years from now, in the year 2014, with costs projected to increase at 7%. 

The annual net current cost is assumed to be $10,000, based on $12,000 for tuition, room, board, books, fees, transportation and incidental spending money, less an assumption of net $2,000 summer earnings.  (We also showed current $8,000 and $13,000) 

The traditional four years have been marked with an asterisk.  The expected need totals $106,995; assuming the student only attends for four years. 

A fifth year of school, such as for a master's degree, currently costing $13,000, might be at a higher cost then - $41,064. 

For your sake and for the sake of your family, isn’t it obvious that advanced planning and savings will be necessary? 

EDUCATION COST PROJECTIONS AT 7%

                         CURRENT NET COSTS

Sources:  Don't Miss Out:  The Ambitious Student's Guide to Financial Aid, 2001-2002

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Last modified: 05/11/10