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October 22, 2009

The Rising Cost of College Tuition

Filed under: News Review, Personal Finance — Tags: , , , — thebalancedspreadsheet @ 11:14 am

The AP ran an article Tuesday, citing date from the College Board, on the rising cost of college tuition.  As someone who paid for school themselves without incurring any student loans, I am always curious to see how much college cost is running these days. As well as how much student are borrowing to pay for their education. 

Some of the more notable quotes:

“Average tuition at four-year public colleges in the U.S. climbed 6.5 percent, or $429, to $7,020 this fall as schools apologetically passed on much of their own financial problems, according to an annual report from the College Board, released Tuesday. At private colleges, tuition rose 4.4 percent, or $1,096, to $26,273.”

“Still, this year’s increases were bad news for the estimated one-third of students who do not receive grant aid and must pay full price.”

When I graduated in the spring of 2004 my tuition was about $6,000 for my senior year.  So $7,000 a year for public college in 2009-2010 sounds about right.  Also that means private school is about 3.75 times more expensive then public.  Unfortunately with these price increases, more borrowing for college has occurred.

“Meanwhile, students also borrowed more to pay for college — but much more from the government and much less from other lenders such as banks. After years of expansion, private borrowing collapsed from around $24 billion in 2007-08 to less than $12 billion last year, the aid report estimated. “

“On average, about two-thirds of bachelor’s degree recipients borrow money, and their median debt is about $20,000 by graduation.”

Obviously I am not a big fan of student loans or debit in general.  To see 2 out of every 3 undergrads with student loan debt before they land their first professional job is troubling especially since half have $20,000 or more.  That does not seem like much of a blessing, but more like a curse.  Going through undergrad debt free is very possible if you do things the right way. 

As somebody who is hoping to have children that go to college someday this article is kind of scary.  To think how much college is going to cost in 20-25 years is pretty mind numbing.  The key though is planning ahead.  If you are able to start early enough with college funding the financial blow is not as hard as somebody who starts when their child is 16. 

Reading the whole article just makes me glad I went through college when I did without any debt. This allows me to be able to enjoy the fruits of my labor without any payments and no more worrying about increased tuition costs. 🙂

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