Skip to Main Content

Start Of Main Content

Life 101: How to pay for college

Be ready for those higher education costs by planning ahead.

Graduates taking self-portrait together outdoors

A college degree can provide greater lifetime earnings and career opportunities, but paying for college can be difficult. Here's a snapshot of what's in store and ways to pay for higher education costs.

What is the cost of college?

Costs at a four-year college include tuition, fees and room and board, but be aware there are also extra costs for books, and some majors in the arts or sciences have added costs for supplies.

Tuition and fees: Tuition is what colleges charge for instruction. Fees can differ vastly at each college, and are used to support things like libraries, athletic facilities or other campus clubs and organizations. The average 2019-2020 costs for college tuition and fees are:

  • Public colleges (in-state): $10,440 
  • Out-of-state public colleges: $26,820
  • Private colleges: $36,880

Room and board: The cost for room and board varies, depending on the school and the type of food plan you choose. The average 2019-2020 costs for room and board are:

  • Public colleges: $11,510
  • Private colleges: $12,990

Books and supplies: The average 2019-2020 costs for college books and supplies at both public and private colleges is $1,240.

What is the average student loan debt?

The percentages surrounding student loans in 2019 vary somewhat by the type of college attended, but the averages are shown below.
  • Students who graduated with student loan debt: 71%
  • Amount of average student loan debt: $31,172
  • Average monthly student loan payment: $393

What is the payoff for college?

On average, college graduates earn 84% more than high school graduates, which translates to nearly $900,000 more over the course of their lifetimes.

Annual earnings for those 25 and older with full-time, year-round jobs:

  • Bachelor's degree: $52,019
  • High school completion: $29,815
  • High school not completed: $21,738

How can you pay for college?

There are several options for paying for college, and most students use a combination of two or more.

529 plans: 529 college savings plans are designed to encourage families to save for college. Contributions may qualify for an income tax deduction or credit. The average amount saved in a 529 plan: $24,153

Financial aid: 62% of first-time, full-time undergraduate students at four-year institutions receive federal financial aid. Fill out the Free Application for Federal Student Aid (FAFSA) and discuss options with your institution’s financial aid office.

Scholarships: There are many types of scholarships available, and a student could benefit from doing some simple research. Scholarships are either merit, financial-need or category based. You can find out more by talking to a high school counselor, the financial aid office at your chosen college or consulting the U.S. Department of Labor’s free scholarship search tool.

Private loans: These loans typically offer both fixed and variable interest rates, but repayment options are less flexible. Read the fine print, including whether repayment levels are tied to income.

Federal loans
: These may be cheaper and have more repayment flexibility than private loans. Interest rates are fixed, meaning they won’t change over the life of the loan. There are also options for parents, such as Parent Loan for Undergraduate Students -  PLUS loans.

Jobs and direct payments:
70% to 80% of students work at least part of the year while attending college. You can also ask your tax planning professional about eligibility for credits or deductions.

How State Farm® can help

Contact your State Farm agent today for help understanding your options for saving and paying for college.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. State Farm makes no guarantees of results from use of this information.

Before investing in a 529 plan, consider the plans investment objectives, risks, charges, and expenses. Contact the plan issuer for an official statement containing this and other information. Read it carefully.

An investor should consider, before investing, whether the investor’s or designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program.

Securities are not FDIC insured, are not bank guaranteed and are subject to investment risk, including possible loss of principal.

Neither State Farm® nor its agents provide tax or legal advice.

AP2020/04/0374




833-204-1617

Also Important

Life Basics for College-Bound Kids

Life Basics for College-Bound Kids

Prepare your student for the transition from home to college. Discuss finances, health, and insurance to help college-bound kids manage classes and personal life.

How to Reach Your Financial Goals

How to Reach Your Financial Goals

Whether the amount is big or small, calculate how much you need to save each month to reach your goal.

Related Articles

Get Your Kids Saving for College

Get Your Kids Saving for College

Teach your kids good financial habits.

Ways to Save for College

Ways to Save for College

There are many ways to save for college such as 529, Coverdell, and Uniform Gift to Minors. Let us help you by offering savings and debt reduction ideas.

Give the Gift of an Education

Give the Gift of an Education

How should you save for your child's college education? Consider these plans.