Thursday, January 24, 2013

COLLEGE IS NOT CHEAP BY THE FRUGAL DAD


 
If you are in college or know anyone who is you know that the costs may be outrageous. Here are some information on the costs and how you can pay for college.

There are dozens of benefits that justify earning a higher education, including–but by no means limited to–better employment prospects, access to jobs with higher pay and the broadening of a college student’s social and mental horizons. Even so, approximately one in two high school graduates choose to forgo these potential benefits because they cannot reconcile the cost of the college experience with the bleak reality of the financial situation in which many new college grads find themselves.

There’s no denying that college is outrageously expensive. And, unfortunately, it is only getting worse; while the average family income in the United States grew 147% in the years between 1982 and 2007, the cost of college grew by a staggering 440% in that same period. What that means in terms of real numbers is that the average cost of a four-year degree from a state school is now $30,000. Most American families do not have that kind of money up front, which necessitates that they borrow it from private or government programs that issue student loans. Unfortunately, student loans leave college graduates an average of $20,000 in debt when they finish school. And approximately 10% of graduates will have twice that debt to repay. Collectively, American students owe more than one trillion dollars.

Figures like these, in combination with the fact that only half of all college graduate obtained a full-time job in 2011, are why more than six million graduates cannot pay back their student loans. The economic recession that began in 2008 has made it exceptionally difficult for college graduates to find jobs in their field. The upshot is that students take on lower-paying jobs that do not require degrees in order to make ends meet. Even so, that limited income is, in many cases, not enough to pay back their debt.

One in six default on their loans and a whopping 85% of 2011 college graduates were forced to move back in with their parents after school because they could not afford their own living space. To keep your children from contributing from that statistic, there are several ways to start saving well ahead of the day they move into the dorms:


  • Start when your kids are young
  • Contribute regularly to a savings account
  • Invest wisely in equities
  • Take advantage of 529 College Savings Plans
  • Utilize tax credits for parents of college students
Of course, parents do not have to shoulder the entire responsibility of their children’s education. There are many ways for students to help pay for their own education, including earning scholarships, applying to federal student aid programs and participating in work study opportunities. To make sure teenagers are contributing to their college funds, parents can encourage them to grow their own income by saving money from a part-time job. Remember, saving just $20 per week by making small sacrifices leads to $1,000 in savings over a year. And with college tuition rates steadily increasing, every dollar counts

College Isn't Cheap


College Isn’t Cheap by FrugalDad.com is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.
Based on a work at  http://frugaldad.com/2013/01/04/college-isnt-cheap.

47 comments:

  1. I wish they had the college savings programs when my kids were young. I was just barely making ends meet. When it was time for the kids to go off to college, we had to do parent and student loans.

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  2. We also did a comboof pasrent and student loans. It was a lot of money, but at least the rates were low.

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  3. ARGH - college expenses are crazy expensive. I wish more people would make themselves aware of this. I know my parents didn't even come close to thinking about college or post-secondary educational costs and I ended up in a bad financial situation because of it. Pay heed parents!

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  4. We've decided to start a savings account for our kids' college fund. I've had to deal with student loans, and I wish my parents had set aside some money for my education expenses. Very expensive!

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  5. thanks so much for the post our daughter is going to start in a couple of years so im glad i read this

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  6. This infographic is great! I only wish my parents had thought of this when I was young! College is not cheap for adults either!

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  7. We don't have children, but I can't imagine having to put them through college during these times.....Thanks for helping me be a little more aware. I just thank the lord my parents had it together back when I went to school (30+ yrs ago)

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  8. Having significant student loan debt I definitely know how important it is to save for your children.

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  9. My daughters college tuition is 23K a year. We pay 1/2 of that. She qualified for a bunch of four year scholarships. Her actual outlay is about $4500 in loans a year. I don't think that a $20K loan over the course of her college years is a lot to pay over 10 years at low interest. It's about the cost of a new car. Many of her friends are financing 5o to 100% of their college costs making what they have to pay so much more than she will. In agreement for paying 1/2 her tuition she has had to bear the cost of her books and she is a commuting student as well. Paying $50K for her tuition has not been easy on us, but it was what we saved for her college. Both her father and I feel that college is not a birthright and that while we are willing to help out we were not going to give her a free ride. Many other parents think that we are wrong in our approach, however, we have no problem with it.

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  10. wow I never really thought about that!

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  11. I wish my parents had put money aside for me to go to college :( One thing that can save some money - if there are any community colleges in your area students can often take some of their basic general courses required for any degree there, then transfer to a state college or university. Just make sure the courses are transferrable and by spending the first year at a CC students can save a bundle. And those general requirement classes are pretty much the same wherever they would go - english 101 is english 101 :)

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  12. My parents never saved for me or my siblings wish they would have. My cousin got a full scholarship to a college and didnt take it since he wanted to follow his then girl friend who is no longer his gf. His parents told him if he didnt take the scholarship they were not going to help him with the student loans and such. Two years later he is now wishing he would have followed what everyone told him and taken the full ride.

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  13. Replies
    1. Totally off topic, but my maiden last name is Warden. :D

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  14. University is definitely more expensive than when I attended over 30 years ago and I paid my own tuition. I dont have children so I cant speak to what it would be like nowadays. Thanks for the insightful article though!

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  15. I am not looking forward to the day my kids go to college, I still have 8 years but it will be here TOO soon.

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  16. My son is a senior and he wants to take a year off before he goes to college. At first I told him no but now he has 3 job opps that could really pan out so we think it might actaully be a better choice for him. He is a hard worker but not when it comes to school.I believe if you have a good work ethic you can still make it out there.

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  17. We've got savings going, but yeah...by the time our children get to college it wont be nearly enough. It's frightening how the costs have gone up and will continue to. None the less college is very important in our family and we're going to do what we can to make sure our children have the opportunity.

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  18. My wife and I had planned on helping our Children with tier Children's college funds. Now that I have seven Grandchildren it is becoming a loosing battle to keep up with rising tuition cost in the future Thank you for the great post

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  19. It's a Friday Flash Blog! Please share your favorite posting of the week and see what others are talking about at http://www.fridayflashblog.blogspot.com

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  20. With four children at home, my parents were not financially able to pay for our college educations past the first year. It was an unwritten rule that each of the siblings were responsible for any further education. As life takes different turns, I only completed my first year, but several years later returned to complete my education. By that time the costs had skyrocketed, thus leaving me owing many dollars for my student loans. Although the cost of tuition is considered high, I believe the cost of the books is completely outrageous, and even if you sell your books back to the bookstore, you only get about 10 percent back on the price of the book.

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  21. Thanks for all the great info for saving for college. I do hope 1 or 2 of my grandsons will choose to go to college. It is so expensive for everything. I think it is best to save a little bit each week as it does add up.

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  22. This is great info, thank you! My son will be going to College next year, unfortunately, for most of it, he'll have to get a student loan. It's so expensive!

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  23. Grandparents can contribute to college funds for birthday and Christmas or regularly. Kids usually get too much STUFF for gifts ... and the gifts are soon forgotten anyway.

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  24. As the mother of a high school student, this terrifies me.

    It really does.

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  25. I'm a mother of a high school student who goes off to college in 2 years. The cost is terrifying to think about -- a student loan is a must, unfortunately.

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  26. Great infographic. My older daughter is 10 and my younger daughter is 17 months. This shows how important it is to prepare now!

    Brooke
    brooke811 at ymail dot com
    http://www.brookeblogs.com

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  27. Wow! These are staggering statistics! I can't believe the default rate on student loans. My husband works for a university and I am hoping he will still be working there when our daughter goes to college in a few years.

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  28. This is a great article, very informative! Thanks for the tips!

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  29. THIS IS A GREAT REVIEW ARTICLE -MY GRAND-DAUGHTER GRADUATED FROM TEXAS A&M AND SOUTHWEATERN COLLEGE OF LAW SCHOOL AND HAS A HUGE DEBT BUT SHE IS A ATTORNEY FOR A PRETTY BIG LAW FIRM NOW

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  30. Good use of imagery to show statistics.

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  31. love this infographic! Crazy stuff. Thinking about it is scary.

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  32. This is good information to have in my pocket, thank you.

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  33. Whoa. Just looking at this makes me stressed

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  34. Great info. I could use this in the future!

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  35. Great infographic. College is not for everyone but higher education is. Get an Assoc degree or certificates and get your 4 year degree later. There are options.

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  36. These statistics are very disturbing. With numbers like this it very hard to justify going to college. I know everyone wants their children to have a promising future, but for some college may not be the answer. My fiance has a degree in business and had to settle for a customer service job. My brother has never been to college and works as a Railroad Conductor and makes more money than most college graduates I know. If college is for your child there are so many great resources available especially online for scholarships. Thank you for this very informative post.


    Jennifer Hedden
    jenrenh@hotmail.com

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  37. Costs are out of hand, same with health care.

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  38. I wonder how some countries offer free college and have very good grad. turnout ?

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  39. College is crazy expensive these days!

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  40. I really like the 529 plans to help save for college.

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  41. my kids are in college now, and these are good things to know!!

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  42. I am amazed at the default rate on student loans, but it is understandable because so many college graduates still are working average jobs at average pay, despite their education, and most of the time outside their specialty field of study.

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  43. These statistics are incredibly sad. There is nothing more important to any society than education - it is what allows us to grow both as individuals and collectively. It's no wonder that the economy just keeps getting worse when nobody can afford to go to school, and those who do take the first job they can find just to attempt to pay off the school-mortgage. All that does is not allow them to use this education they have payed so much for to actually contribute to society in a meaningful way. We can't grow as a society if all of our new ideas are being wasted on sweeping floors and pouring drinks. Maybe your server at Starbucks could be curing cancer, if given the chance.

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  44. I think this is fantastic. I got an Associate's Degree and my parents helped me pay for school but I also had student loans and worked several jobs. Having 3 kids to put through college is SCARY!

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  45. I opened college saving accounts before I even started dating my husband! :)

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  46. Noone needs to go to an expensive university; at least start with a decent community college and if the career you want to pursue requires that you have a "prestige" degree (and so few do!) transfer after a couple of years. Another alternative: My sister lives in Canada and the price of even the best universities is unbelievably low, even for foreigners.

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Thanks for stopping by. I look forward in reading all of your great comments. Have a great day!

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