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Here's How to Calculate How Much Money You Need for College

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If you and your child have arrived at the second half of high school—congratulations! Getting ready to plan for college is an impressive accomplishment and a major life milestone. Now you've come to the tricky business of determining exactly how much to budget for the next phase of their life.

The ultimate out-of-pocket figure hinges on lots of variables, like the type of school your child plans to attend, if they will have access to student aid or scholarships, and whether they will live on campus or commute. To understand what college will cost for your child, begin the process by looking at average college cost figures to get a feel for a budget.

Once you have familiarized yourself with national averages, take a look at each potential school's website, where they list expected costs for the academic school year. Using a calculator like this one helps tabulate total costs, and even allows you to upload financial aid information or use financial aid estimates. We'll detail each of these steps below in a step-by-step guide to understanding college costs and creating a realistic budget.

Step One: Look at National Averages

National college cost averages are provided by College Board, which has been tracking the cost of college for over a century. It looks at two different figures: the "sticker price,"which is the full price for a student with no aid, and the "net price," the average price paid by students and their families after aid, scholarships, and tax deductions are accounted for. Additionally, you can use the list below of national averages (current as of spring 2018) as a personal checklist when making your own annual college costs budget.

 

Tuition and Fees 

Tuition is the cost of instruction—classes, discussions, labs, and so on. Additionally, colleges and universities charge service fees for amenities such as campus recreation centers and libraries.

Four-Year Public In-State: $9,970 sticker price, $4,140 net price

Four-Year Public Out-of-State: $25,260 sticker price, $19,060 net price

Four-Year Private (Nonprofit): $34,740 sticker price, $14,530 net price

My expected tuition and fees: ________________________

 

Housing and Meals

Also known as "room and board," the total cost of housing and meals will vary depending on the type of meal plan and campus housing you choose.

Four-Year Public In-State: $10,800

Four-Year Public Out-of-State: $10,800

Four-Year Private (Nonprofit): $12,210

My expected housing and meals costs: ________________________

 

Books and Supplies

This covers the textbooks each student will have to purchase for classes. Some schools also include the cost of a computer in their estimates.

Four-Year Public In-State: $1,250

Four-Year Public Out-of-State: $1,250

Four-Year Private (Nonprofit): $1,220

My expected books and supplies costs: ________________________

 

Transportation

These figures estimate the average annual cost of transportation for students. Because each college self-reports this budget item, some schools may include the cost of travel to and from school (between semesters) and others may not. Transportation costs will vary quite a bit depending on whether your child will travel by plane to and from school, have a car on campus, or have a long commute to school. Use the following figures as a loose guide; you'll definitely want to do your own calculations here.

Four-Year Public In-State: $1,170

Four-Year Public Out-of-State: $1,170

Four-Year Private (Nonprofit): $1,030

My expected transportation costs: ________________________

 

Other Living Costs

Personal spending includes extracurricular activities, clothing, furniture, meals off campus, and the occasional movie or road trip.

Four-Year Public In-State: $2,100

Four-Year Public Out-of-State: $2,100

Four-Year Private (Nonprofit): $1,700

My expected other living costs: ________________________

 

The Total Annual Cost of College

Four-Year Public In-State: $25,290 sticker price, $19,460 net price

Four-Year Public Out-of-State: $40,580 sticker price, $34,380 net price

Four-Year Private (Nonprofit): $50,900 sticker price, $30,690 net price

My expected cost of college (one year): ________________________

 

When calculating the cost of college across multiple years, remember that tuition gets more expensive each passing year. Between 2007-08 and 2017-18, tuition and fees at four-year private colleges increased an average of 2.4% beyond inflation; that figure jumps to 3.2% beyond inflation for four-year in-state colleges. During this time, inflation has increased at an average rate of 1.7% annually as measured by the CPI-U. If these trends continue, it would be reasonable for budgeting purposes to expect that the price of college could increase by 5% each year, though such price increases are notoriously difficult to predict.

My expected cost of college (total): ________________________

Step Two: Investigate Potential Schools 

Each college or university's website should provide cost estimates for the upcoming school year, so it's important not to rely entirely on averages as every school differs in how it calculates tuition costs and offers aid. Checking out the websites for specific schools (and other online resources, such as the National Center for Education Statistics' College Navigator) will give you the best idea of what you can expect to pay as compared to both the national average costs and the costs of other schools on your list. It could be helpful to print this article and write in your expected costs for each category in the spaces provided. 

Step Three: Personalize

When doing calculations for college costs, be realistic about where you'll go over (and under) compared to both the school and national averages. For example, if you know your child will need to get on a flight four times a year to get to and from campus, round up.

If you want some additional help calculating the cost of college, check out a college cost calculator, like this one from CommonBond. Not only does it factor in anticipated expenses, you also have the option of automatically uploading the information from your college aid letter (or using aid estimates) to determine your own personal net cost. It also gives you an idea of how much you'll need to borrow in student loans after accounting for all aid.

Amanda Holden worked in investment management for six years and now gives comedic, inspiring personal finance presentations to businesses, schools, sororities, and women's groups through her company, Invested Development. She also writes a blog called The Dumpster Dog Bloghilarious, no-BS personal finance education for young women.

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