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Why Does College Cost So Much?

Why does college cost so dang much? On average, it costs an institution about $5,000 more per year to educate an undergraduate student than that student is paying in tuition.

So, who’s covering the difference? Public support, in the form of state and local governments, covers 53% of total education revenue. Seems like a good share, right? If it weren’t for public support, then college would likely cost more — possibly 53% more. While the cost college seems sky high, it definitely could be worse. So who’s picking up the extra cost?

You guessed it — the student, in the form of paying higher tuition.

Tuition is often influenced by a school’s responsibilities or values:

  • In-state students may receive a lower price because the school’s mission is to educate residents of its own state.
  • Private institutions may charge students different amounts because they have more flexibility in distribution of funds.
  • Research institutions may charge more due to the nature of their programs of study.

And while schools are trying to appeal to top students, schools are also trying to recruit and keep top faculty and administrators. Teaching salaries, pensions and differences in cost of living also affect whether tuition goes up or down.

My suggestion? Don’t get discouraged by a school’s high sticker cost. Apply to a variety of schools, including public, private, in-state, and out-of-state, to see what your actual cost of attendance will be. Once you know that, consider the cost over the next 2-5 years and the amount of money you will make after graduation. Is it worth it?

If the cost seems too high, then consider alternative methods:

  • Choose a less expensive school. If you’ve got what it takes to succeed, then you’ll likely be successful at almost any school you choose.
  • Start at a community college. Save some money upfront or choose a career that only requires an associate degree.
  • Work for a company that offers tuition reimbursement. Gain valuable work experience likely applicable to your college experience.

Side note: tuition and fees are just one piece of the total cost of the attendance pizza pie.

You can also influence cost by applying for scholarships, buying used books, or simply living frugally, and don’t forget to file your Free Application for Federal Student Aid (FAFSA) every year. The U.S. Department of Education awards more than $120 billion a year in grants, work-study funds, and loans to more than 13 million students. Remember, though, if you want something you can only afford with student loans, I strongly encourage you to rethink. Use your resources wisely. Like I tell the students I work with, “Don’t create a lifestyle you can’t maintain upon graduation.” Unfortunately, I have seen too many students create a lavish lifestyle on student loans that cost more to pay back and often delay future wants, like buying a house or starting a family.  

College can be expensive — very expensive — but it’s an investment in yourself. While you may feel like you’re paying a lot, it’s actually costing the school more. Yet I believe that most things worth having rarely come easily. Your future is worth having. 

To discuss your future, schedule a free meeting with one of our College and Career Planners!

CommunityAmerica Credit Union has College and Career Planners ready to assist you through all the stages of planning for higher education and beyond. From calculators and checklists to deeper discussions about financial aspects, we can help. Our goal is to help you reach yours.


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