College degrees can be costly. You’re about to make a big investment in both time and money. So how do you know if you’re getting a good deal?
As with any other major purchase, you need to understand the market value of what you’re buying. It’s convenient to represent higher education expenses with dollar symbols, much the way travel guides represent the expense of restaurants or hotels. In the cost index below, we give examples of schools at each price point, along with the actual cost of each school’s 2017–18 tuition plus fees.
College Cost Index
The costs indexed below are for full-time study (covering two semesters), and exclude living expenses (food, housing, transportation, etc.), which can add a considerable amount to your education costs as well. Drawn from the National Center for Education Statistics in 2018, the figures below are presented in increments of $5000, rounded to the nearest $100 mark:
|＄＄＄||Approximate Cost||Example College||Example College Actual Cost|
|＄||$5,000 or less||Santa Barbara City College||$1,400|
|＄+||$10,000||University of Iowa||$9,000|
|＄＄＄＄+||$40,000||University of Dallas||$38,800|
|＄＄＄＄＄＄||$55,0000||Sarah Lawrence College||$54,000|
|＄＄＄＄＄＄＄+||more than $55,000||Columbia University||$57,200|
This “restaurant guide” approach to representing higher education costs is useful because the data above remains pertinent even as tuition costs rise, which they tend to do every year. Even as these rates rise, the dollar-sign rating of each school tends to remain constant over the years. For instance, Sarah Lawrence College has consistently been a six-dollar sign ($$$$$$) school while most city and community colleges have consistently remained single-dollar sign ($) schools.
Navigating the Cost of College
As you consider the costs above, there are a few other factors to keep in mind:
- First, there is a huge difference between in-state and out-of-state tuition for state schools. For instance, the University of Iowa is a $+ school for Iowa residents, but tuition and fees for out-of-state students come to over $30,000, making it a $$$$ school for non-residents. In general, out-of-state tuition is usually about three times that of in-state tuition. To learn more about opportunities in your state, check out The 100 Best Colleges and Universities by State 2018–2019.
- Second, there are lot of different ways to build a quality educational experience and earn a valuable degree. The cost index is a clear demonstration that while you can spend nearly $60,000 a year on tuition alone for the most expensive colleges, you can also attend a reputable city college or state university for significantly less than $10,000 a year. Check out The Most Affordable Four-Year College in Each State.
- Third, many schools, even the most expensive among them, can offer scholarship and aid packages that drastically reduce student costs. For example, an athletic, academic or need-based scholarship can reduce your tuition costs to half-price or even to zero, and can include aid for housing and other expenses. A wide of additional scholarship opportunities and aid packages for low-income families can also reduce costs. This means that there are ways to offset the costs reflected in the index above. To learn more about scholarship opportunities that might apply to you, check out our Scholarship Directory.
Getting Value From the Cost of Your Education
To understand the value attached to the cost of your education, consider some of the figures that economists commonly use to understand market behavior:
- The Consumer Price Index (CPI) is utilized by the federal government to track the rising costs of goods and services every year.
- The Higher Education Price Index (HEPI), compiled by the Commonfund Institute, tracks the inflation rate and rising costs of higher education, and measures these figures against the CPI.
Annual HEPI reports show that higher education cost inflation typically outpaces consumer inflation, sometimes at double the rate, or even higher. In fiscal year 2017, for example, the cost of higher education grew at 3.7 percent, the largest inflation rate — and largest jump in the inflation rate — since 2008.
According to the U.S. Bureau of Labor Statistics, during the same time-span, the CPI rose by 2.5 percent. While both were up for the year, the already-high price of a bachelor’s degree significantly outpaced the rise in cost of the average grocery bill. The bottom line is that if you are a parent thinking of saving for your children’s education, you’ll need to invest your money in a way that earns you returns well ahead of the pace of ordinary inflation. This can be a challenge.
Money and affordability are major concerns for most families and individuals pursuing college and university degrees. Our cost index is intended to:
- Describe the approximate annual cost of degree programs;
- Provide online college price comparisons; and
- Compare the costs of different types of programs.
These factors can all help to give you a clearer sense of the value for your dollar. Higher education costs are extremely variable, and paying more doesn’t necessarily get you more.
Another note, as you compare prices. Some schools utilize quarter credits instead of semester credits. This can have a direct impact on pricing and the end cost to you. To find out more about quarter credits and how they impact pricing, read our article Quarter Credits? — Quarter Credits versus Semester Credits.
How much does online college cost?
Once again, note that the costs tracked by our index do not include other expenses, which can add tremendously to your costs, especially if you need to live on campus, pay for a meal plan, or make a daily commute. Beyond offering great flexibility, online degree programs can help students cut down the price of earning a degree by eliminating some of these costly factors.
An online degree program may allow you to study from home rather than paying for campus housing; to purchase affordable groceries in lieu of a costly meal plan; to opt out of mandatory school health insurance plans; and to significantly reduce or eliminate the need for transportation and parking fees. Whether you are a student or a parent, online, in-state degree programs are worth considering for numerous reasons, including their affordability.
Traditional campus-based colleges and universities are increasingly offering online programs. The cost and price structure for these programs is often reflective of on-campus costs, minus the fees and expenses noted above. Some accredited schools offer exclusively online degree programs. Using our cost index above, the average cost of exclusively online colleges is typically in the $$ to $$+ range.
To get the best value for your online college costs, take a look at:
- The 50 Most Affordable Online Colleges for Associate Degrees; or
- The 50 Most Affordable Online Colleges for Bachelor’s Degrees
For an even deeper dive into the cost of college and ways to save, visit The Affordable Colleges Source and learn how to get the best return on your investment.