Yikes! College costs top $50,000 a year

Parents have always complained about the exorbitant cost of higher education. Even back in 1974, when I entered a modest private university in New Jersey, my father went into sticker shock at the thought of paying a whopping $66 per credit. For all his grumbling, however, my dad had been able to salt away enough money from his blue-collar job to pay the entire cost of my bachelor’s degree.

Now comes a story from CampusGrotto, a national college news site, telling us that the cost of one year of college at some schools now exceeds $50,000. In fact, the award to the highest-priced school goes to a classy neighbor of ours …

That school is the venerable Sarah Lawrence College in Bronxville, NY – hardly more than a stone’s throw from Consumer Reports headquarters in beautiful not-quite-downtown Yonkers.

Sarah Lawrence’s prestigious list of graduates includes people like designer Vera Wang, Pulitzer Price-winning author Alice Walker, and TV journalist Barbara Walters. And at $53,166 tuition, room and board at Sarah Lawrence is higher than the medium annual household income. Ouch! And Sarah Lawrence isn’t alone. George Washington University, New York University, and dozens of others are in the same ballpark.

I guess it’s just a sign of the times. But what a lousy time for college costs to keep rising – right when most of us are grimly watching our financial lives fall apart.

When it came to my daughter’s education, for example, my wife and I thought we’d done all the right things. We set up a 529 College Savings account when she was only a couple of years old, and making regular contributions. But who figured on an economic meltdown? When I looked at my most recent statement, for the nine-month period between January and September the account had dropped in value by nearly $7,000 – which is more than my entire four-year education cost.

Sure, I realize there’s inflation (even though tuition seems to be increasing at two to three times the current inflation rate), but the point is clear. I dread seeing what the next statement’s going to look like. And the timing! My daughter is a high school junior and the clock is ticking.

So what’s the average person to do aside, from taking on massive debt and years of student-loan payments. Community college is becoming a more affordable option for some families, since you can transfer after two years to a state school or more prestigious private institution to complete your degree. And no one will ever know, since the school you graduate from is the one that awards the degree.

Scholarships and financial aid packages are options, as well, and many schools, even expensive ones, offer generous packages to help defray the costs.

The experts over at The Consumerist have a nice collection of articles on financing college. If you’re the parent of a soon-to-be college student, you might want to check them out.

Has the economy wreaked havoc with your family’s college plans? Have you or a loved one had to put off school, trade down, or come up with creative financing to make a college education a reality? Please pop in a comment below -- or write to me at tightwad at cro dot consumer dot org.

Comments

[Robert Nigara]

The college students of today are our future leaders, inventors, etc...etc. How about a law that limits the amount of interest charged on ANY student loan whether federal, state, banks, etc. be capped at 3% annually. At todays rates of 6%+-1% these students need the whole 20 years to pay it back! (If they can get a job.) Give the current and newly graduated men and women of this country a BAILOUT as this government seems to be in favor of!!!

[Susan Bailey]

Not to worry father-of-the-college-bound, I have the cure!!

My daughter just graduated from the recently ranked "26th best school in the world" (yes, world) and all in, we only paid an average of $20,000 a year. With NO loans, NO scholarships, NO financial aid. How is this possible you ask? Because she went to McGill University in Montreal. They even have a reciprocal arrangement with the U.S. so the money you saved tax-free in that 529 is not penalized if you use it at McGill. In fact, there are countless Canadian schools where the 529 money works. Trust me -- this Canada thing is the best kept financial secret in the US.

Even paying FULL international rates, McGill is a fraction of what the best US schools cost. And without forfeiting ANY of the prestige. When recruiters ask her where she went to school and she says McGill -- the response is invariably either "Ooooo" or "Ahhhh".

And the icing on the cake? She got to live in one of the coolest cities in the world. Improved her French AND (we're in Connecticut) she was no farther away than she would have been at a lot of great U.S. schools. Mind you, I love great U.S. schools. My husband even works at one, but when you can't afford to send your child to one, the Canada option looks pretty darn good.

Go north, my friend, go north. It will be one of the best financial moves you will EVER make. Good luck!

TOD SAYS: Kudos to Canada! Affordable prescriptions and affordable medications. How do they do it?!

[Michael Kirlin]

The head to Canada advice is pretty good. I was in Edmonton last year and spoke to a young gal from Washington State, who attended the University of Alberta. Private schools certainly could not match the cost of attendance for her. She would have done better in an in-state public school, however.

Nothing is a replacement for saving as much as you can afford when the kids are young and you commit to a college education for them. When the market turned sour, in 2002, I purchased a prepaid 529 plan for my three kids. They will have tuition and fees covered for five years if they go to the University of Washington or Washington State. And I do not have to worry about the stock market or guaranteed tuition increases. How good of a deal it is for parents today is another matter, though. Timing is part of any investment. Even if a parent has a stock-based 529 or other college plan, it would behoove one to pay close attention to the markets and have sense of what they might do (something most people cannot begin to do with success), or be invested in an age-based plan that reduces risk when one gets near college age (something any investor could do.)

Any little bit of saving is a good thing. But consider retirement before saving for college. And look into whatever state plans and programs that are available. Study the higher education board web site of your own state to see what college costs will be and what can be done to cover them. My state, at least, has a lot of information on saving for college that works for a lot of families.