Report: Your Kid’s College Degree Could Cost A Half Million Dollars One Day
Projections from the investment firm Vanguard predicts that in 18 years a private college (including tuition, room/board, and other fees) could run you over $120,000 a year, and over $54,000 a year for public ones. That may make you want to say screw it and just send your toddler to college next fall to save money. Sadly, the only thing they have in common with John Belushi is what their face does to mashed potatoes. So that’s not an option.
Before you start Googling homeschooled bachelor degrees, it may not be that bad. First, the figures come from a 2014 report from College Board that looked at 3,105 public and private colleges. They found the average cost public universities to be around $18,943 and private ones $42,419 for the 2014-15 year. Without accounting for inflation, the report found a 2.8 percent increase in 2013 and a 2.9 percent increase in 2014 — the lowest increases since 1974, but still an increase.
When you figure in the current inflation rate of about 2.7 percent, that’s slightly below Vanguard’s projected increase of 6 percent a year. Not only do you have that going for you, but College Board’s report also noted that approximately 2/3 of full-time students paid for college with financial grants or scholarships. Full-time students enrolled in private institutions averaged $18,870 a year in aid, while students at 4-year public universities received about $6,110 and $5,090 for 2-year colleges.
In the end, you’re still be dropping a lot of cheddar and not in the form of bunnies. Many financial experts advise parents to follow the rule of 3s — or thirds, that is. This states that, ideally, parents save a third of what they think college would cost (a hell of a lot), borrow a third, and then spend a third when your kid actually gets in. It’s not exactly “beg, borrow, and steal,” but feel free to nickname your kids that. Especially if you’re putting all 3 through school.