Student Loans

The True Cost of College

The True Cost of College #Infrographic

I hope everyone had a great Memorial weekend. This week, I’ve been working with my illustrator, Aaron Kizer, on the my upcoming book, The Lemonade Stand. His artwork is gorgeous and I can’t wait to share the new book with you later this Fall. In the meantime, I wanted to wrap-up May with some final thoughts about college.

Overall, I still believe college is a good investment and strongly encourage you and your child to read through my Important College Considerations and Conversations before they begin applying to colleges. Once you both mutually agree it’s right for your son or daughter then prepare them to navigate the financial world during and after graduation. College is an amazing privilege, but one you need to make sure your child is prepared to handle.

I have an interesting infographic that shows the true cost of college. A couple things to keep in mind, this assumes that the student applied for and received various scholarships and grants. I cannot tell you how many parents I talk to who don’t fully explore this opportunity and potential gold-mine.

They assume their kids won’t qualify or don’t know where to look, so they go directly to financing their child’s education via student loans. Don’t overlook scholarships and grants; they can make a substantial difference.

Additionally, don’t forgot about some of the hidden costs. We automatically think of tuition, room and books and to a lesser extent meals. But what about transportation? Car insurance? Gas? Food (if they don’t live on campus and have no meal plan option)? Health insurance? Cell phone? Laptop? Entertainment? Clothes?

Some of you may say beyond tuition and room that your child is on their own. Fair enough. But make sure they clearly understand this and most importantly, have a way to earn money to cover those additional expenses beyond a credit card. You don’t want to substitute student debt with credit card debt.

The True Cost of College

Shannon

The Heavy Purse Store is now open! My new downloadable Money Club Workbooks are now on sale. Each workbook provides five targeted lessons to help you raise Financially Confident Kids. Please check them out in The Heavy Purse Store.

Photos courtesy of www.freedigitalphotos.net.

May 29, 2013  •  40 Comments  •  Student Loans

Leave a Comment

Comments

  1. Wednesday, May 29th, 2013
    That is all extremely overwhelming! I am so worried about what college may cost when my kids are ready. That's 14 years from now!
    • Wednesday, May 29th, 2013
      It is overwhelming, Holly! It makes me nervous thinking about the future cost of college for my girls too. On the plus side, we're both thinking about now when they are young and we can save some money to help out. Unfortunately some parents don't think about it until their children are applying for colleges.
  2. Wednesday, May 29th, 2013
    Interesting infographic. I just don't understand how it costs so much. I would be seriously thinking about whether or not I went to college if I lived in the US with the amount of money it costs and the poor job prospects when you finish.
    • Wednesday, May 29th, 2013
      It's so fascinating getting people's perspectives from outside the States. College is definitely an investment and one that needs to be considered, rather than automatically sending your child. Right now we're in a perfect storm of increasing tuition and a shaky job market. This will cycle, but parents need to prepare their kids to handle their finances during and after college in both good and bad times, otherwise their investment may not payoff as they intended.
  3. Wednesday, May 29th, 2013
    It's unfortunate how often only top notch colleges will give full funding to those who can afford very little of the tuition--a skewed meritocracy.
    • Wednesday, May 29th, 2013
      I think too many people rule themselves unqualified for various scholarships and grants without digging deeper. You don't know until you look and sometimes even apply.
  4. Wednesday, May 29th, 2013
    Good points, many forget all the additional hidden costs that come with going to college. It's always surprising to me how much the US pays for their education. Wow! And we complain here, where last time I checked, most uni tuition costs are hovering in and around the $5,000-7,000/yr range.
    • Wednesday, May 29th, 2013
      Often times when I'm meeting with clients to discuss college costs, I find that they haven't accounted for those "extras". And while it's certainly their choice whether or not they plan to pay for those things, they are stilled needed, so somebody has to pay for them. Kids take out loans and accept the maximum amount offered when a lower amount with some good budgeting and a part-time job may be the better option. You can still find some colleges with tuition in the $5-7k range but they are generally small universities in small to mid-sized cities, which, of course, doesn't make them bad and should certainly considered. College is spendy but you can find creative ways to help lower the cost.
  5. Wednesday, May 29th, 2013
    Great info here, Shannon. Interesting stuff about Stanford vs. Cal State. I'm so thankful that you're sharing all of this, Shannon. With 4 kids, we need all of the info we can get!
    • Wednesday, May 29th, 2013
      You're very welcome, Laurie! The more information you have, the more informed decisions you can make for you and your family. Happy to help!
  6. Wednesday, May 29th, 2013
    That's interesting that the most expensive colleges seem to be on the east coast. I agree that people probably don't look into every option when it comes to paying for college. Case in point: me. I was an average student at best in high school. My senior year I took at television production class. I was told by hs guidance counselors that I should go to junior college or trade school because of my grades (jerks!), but instead I applied for a mid-level 4-year college in MI and got in. The city I grew up in had a scholarship for $4k available to a TV type student but I assumed I would never qualify. I mean I barely got into college! But lo and behold I did and I won the scholarship on merit! And by the way I did MUCH better in college, mainly because I didn't have the home life drama to deal with.
    • Wednesday, May 29th, 2013
      You bring up several great points, Tonya. I see a lot of people who don't apply for scholarships and grants because they don't they qualify or could never be rewarded one. And you won't - if you don't apply. Sometimes they think the amount is too small and not worth the effort, but a few small awards can quickly add up and put a serious dent in your tuition. And some kids do thrive in college who may have struggled in high school because they no longer have to deal with home/boyfriend/girlfriend drama.
  7. Wednesday, May 29th, 2013
    Nice infographic Shannon, though very eye opening numbers. I shudder to think of what it'll cost when our oldest will be looking in 13 years. I think there are many avenues that parents do not explore and it is a shame as there is money out there to be had. It may not be a lot, but it all adds up.
    • Wednesday, May 29th, 2013
      Thanks, John. I worry about the cost too. I'm grateful to be in a position where we have been able to set aside money to help cover some of the cost, but I definitely expect to my girls to apply for ever scholarship and grant available too. There quite a bit of free money out there that most people overlook.
  8. Wednesday, May 29th, 2013
    Interesting info here, Shannon. College is just so costly, and when my girl goes off to a university in about 15 years, I am concerned about how expensive it is going to be.
    • Wednesday, May 29th, 2013
      The good news is you have time to set aside a little bit of money and let it grow before your daughter will need it. And the way our world keeps changing, college may look and be very different from what we experienced. :)
  9. Wednesday, May 29th, 2013
    Very detailed infographic! And of course you are correct, it is not only the cost of tuition that they need to be concerned about but also the cost of living expenses.
    And a student will have some of those living expenses even if they are able to live at home with their parents while they attend school. And I don't think that students should assume that just because they live at home that things such as their text books, laptop and clothes will be funded by Mom & Dad.
    • Thursday, May 30th, 2013
      Agreed! Many parents overlook some of the hidden costs because they have been paying them in the past. Now they need to decide if they will continue paying or if their child will takeover. Parents need to decide together then have a talk with their child and let them know what they will cover and what the child will be expected to contribute so there are no surprises.
  10. Wednesday, May 29th, 2013
    Your point about scholarships is a great one. That's an avenue I never really explored and I think it was a big miss. I do wonder if this is just another example of a bubble that has to burst at some point. It would seem to me that the numerous online courses available, while not there yet, could certainly challenge the status quo. Let's hope that some competition brings us better quality and lower prices.
    • Wednesday, May 29th, 2013
      I see so many people make that mistake of not fully exploring scholarships and grants. Yes, it takes some work but the payoff can be significant. With student debt topping $1 trillion and all the attention it's been getting, it wouldn't surprise me to see some changes. Change from an institution always takes time, but parents can start making some changes right now. Making sure the cost of college is relative to the child's earning potential, understanding how student loans work and not automatically accepting the maximum amount, apply for scholarships/grants and most importantly - making sure your child is ready to handle finances during and after graduation. So many kids head off to school with no money skills, which just aggravates the situation. I do agree that we will look at colleges differently, especially with more and more online courses available from respected colleges.
  11. Wednesday, May 29th, 2013
    Yikes! No wonder so many of my fellow millennials are broke!
    • Wednesday, May 29th, 2013
      It certainly doesn't put them in the best financial position starting out, especially if they aren't used to handling their finances. It's a bit of double whammy. :)
  12. Wednesday, May 29th, 2013
    I hope to be able to one day help my kids out with college costs, as my parents helped me out with mine. The costs are pretty scary though. Fingers crossed my future kids get a good scholarship. I will also try my best to express to them they need to get a useful degree. It's common place and expected you go to college after highschool these days, so you graduating with a degree isn't exactly special anymore. Make sure you get it in a high demand field.
    • Wednesday, May 29th, 2013
      The costs are definitely scary. It is very important that parents take the cost of college and their child relative earning potential into consideration. Too many don't and forget that college costs the same for both high and lower paying jobs, even though it may be more difficult for those with lower earning potential to pay off.
  13. Wednesday, May 29th, 2013
    Love infographics like these!! The true cost of college is definitely much higher than we thing. I wish I didn't have as much student loans as I currently do!
    • Wednesday, May 29th, 2013
      Student debt is definitely a burden but you're doing a great job eliminating it! Parents definitely need to prepare themselves and their child for these expenses, particularly afterwards if their child has student debt. They are often unprepared on how to handle debt.
  14. Wednesday, May 29th, 2013
    Infographics like these are so important for teaching people about the true costs involved. It's quite terrifying thinking of what tuition costs might be for my children or their children!
    • Wednesday, May 29th, 2013
      Thanks for stopping and commenting, Alex. It is important for parents to begin planning for these costs long before their kids even begin college. It is a significant investment so you want to make to make sure your child is ready for it.
  15. Thursday, May 30th, 2013
    Very eye-opening and sobering stats about the rising cost of college expenses. Thanks for sharing this information, Shannon - I'm going to share with gym buddies whose kids are going to college in the next couple of years!
    • Friday, May 31st, 2013
      I'm glad I can help them make informed decisions. Have a great weekend, Anna!
  16. Thursday, May 30th, 2013
    Great infographic, Shannon! I don't see the upward trending stopping, for many reasons such as public policy, attitude/perception of college degrees/college grads vs. non-college grads, and demand in general. Should be interesting to see where we are at in ten years...
    • Friday, May 31st, 2013
      Thanks, DC. I agree - who knows what college will look like in the future? I believe it will still exist but the way we approach it may be radically different. The world keeps evolving and we keep adjusting. :)
  17. Friday, May 31st, 2013
    I'm kind of glad to see my suspicions about many Pennsylvanian school's tuition rates confirmed here. Glad in a sick kind of way that just lets me know I'm not crazy. Educational expectations for our workforce here are relatively high, and attaining that degree in this part of the country is no easy feat with tuition rates being what they are. One part of the country I lived in four year universities cost the exact same amount as our community college in Allegheny county. GRANTED, the quality of education you were getting there was crap. I guess that's the trade-off; we have really good schools, but you have to pay significantly higher rates to get that degree.
    • Friday, May 31st, 2013
      It is interesting to see how tuition rates differ throughout the country. And you bring up a great point - cost needs to be considered, but you also want to make sure the college you attend is still good quality. A cheap college of poor quality really isn't a good investment either.
  18. Sunday, June 2nd, 2013
    This is a great and very informative infographic. Did you make it yourself?
    • Sunday, June 2nd, 2013
      Thanks, Kevin. Scholarship Experts created the infographic. I thought it was fantastic and am happy to share it with everyone.
  19. Betty
    Thursday, June 20th, 2013
    Wow! This is extremely eye opening. I am working on a plan to get my family out of debt and to save for things like college for my kids' futures, using information from a book I recently read titled, "Practical Steps to Financial Freedom and Independence: Your Road Map to Exiting the Rat Race and Living Your Dreams" by Usiere Uko- It s a compelling read, I did not stop until I got to the last page. I feel like it is very possible, but now realize that I need to add a little more to my kids' college funds to make things work. So glad I stumbled across your site.

    http://www.financialfreedominspiration.com/
    • Friday, June 21st, 2013
      Thanks, Betty. Getting out of debt is the best thing you can do for your family and should be your top priority. I'm glad you found the infographic informative. Financial independence is absolutely possible but does require discipline and patience. Good luck!
Shannon Ryan SHANNON RYAN, CFP®
  • Meet Shannon

    "As a Certified Financial Planner, it is my passion to help individuals and families build a healthy relationship with money. I look forward to helping you raise financially confident kids.” - Shannon Ryan
Facebook Twitter YouTube