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.
