|A college education is an investment that pays off. According to The College Board's annual report, Trends in College Pricing 2003-2004, median annual income for bachelor's degree recipients is 60 percent higher than median income for those with only a high school diploma. Over a lifetime that difference exceeds $1,000,000.
Unfortunately, investing in a college education is seldom inexpensive. College planning has become increasingly important over the last decade, as college costs have skyrocketed at over twice the inflation rate.
College tuition and fees in the United States experienced an average annual inflation rate of 8.7% over the past 20 years, according to Department of Labor statistics. That's 3.8 percent more than the average annual inflation rate of 4.9% during that same period.
The College Board's annual report, Trends in Student Aid 2003, indicates that almost $105 billion in total aid from federal, state, and institutional sources was available to help students in 2002-2003 to assist with tuition, fees, and other expenses of attending collegean increase of 12% over the previous year, after adjusting for inflation. Most of this increase, however, was in the form of loans rather than grants, and most of the increased borrowing was unsubsidized.
The U.S. Department of Education estimates that slightly more than one-quarter of fulltime undergraduate students live on campus. According to The College Board, the average in-state tuition costs for 2003-2004 were $4,694 and $19,710 per year for four-year public and private universities, respectively. Room and board charges charges averaged $5,942 for public and $7,144 for private universities. These are real costs that should be looked at carefully when preparing to set aside funds for college.
Often times, because it seems far off in the future, little thought is given as to how to save and plan financially for a college education. However, it is much easier to save while the child is growing up and pay for college from our savings than to attempt to pay for college as the expenses are incurred, out of income.