College and university degrees are costly, representing a big investment in time and money. So how do you know you are 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 costs with dollar symbols, much the way travel guides represent the costs of restaurants or hotels. In the cost index below, we give examples of schools at each cost level, along with their actual 2013-14 tuitions plus fees.
The costs given are for full-time study (covering two semesters), and exclude living expenses (food, housing, transportation), which can add considerably to education costs as well. Here is the index:
- $ = $5,000 or less (Santa Barbara City College, $1,400)
- $+ = $10,000 (University of Iowa, $8,100)
- $$ = $15,000 (University of Virginia, $12,400)
- $$+ = $20,000 (Regent University, $16,100)
- $$$ = $25,000 (Hillsdale College, $22,890)
- $$$+ = $30,000 (Calvin College, $28,000)
- $$$$ = $35,000 (Baylor University, $32,700)
- $$$$+ = $40,000 (Ithaca College, $38,400)
- $$$$$ =$45,000 (MIT, $43,200)
- $$$$$+ = $50,0000 (Columbia University, $49,100)
- $$$$$$ = more than $50,000 (Sarah Lawrence College, $51,300)
Each increment here is $5,000. At this writing in 2014, the very most expensive schools top out at around $50,000 per year.
Keep two things in mind about the costs listed here: First, there is a huge difference between in-state and out-of-state tuitions for state schools. For instance, the University of Iowa is a $+ school for Iowa residents, but tuition and fees for out-of-state students come to $27,000, making it a $$$+ school for non-residents. In general, out-of-state tuitions are about three times that of in-state tuitions.
Another thing to keep in mind is that schools can offer scholarship and aid packages that drastically reduce student costs. If, for instance, you get an athletics scholarship, that can cut your tuitions costs in half or even to zero. Academic scholarships and aid packages to low-income families can also reduce costs. Even so, many students have to pay out of pocket, so these costs do provide some idea of the real range of costs you may be facing.
How much does online college cost?
Where do online education costs fit in this guide? Traditional campus-based colleges and universities are increasingly offering online programs, and these typically are priced about the same as programs where students are on campus. Some schools focus exclusively on online teaching. The average cost of online colleges like these are typically in the $$ to $$+ range.
Find scholarships for online students, click here.
This "restaurant guide" approach to representing higher education costs is useful because even though tuition costs tend to rise each year, the number of dollar symbols associated with a school, once adjusted for inflation, tends to stay the same over the years. Thus Sarah Lawrence College has consistently been a six-dollar sign ($$$$$$) school and most city and community colleges have consistently remained a single-dollar sign ($) school.
Inflation has been much higher for education costs than for prices of typical goods and services. The federal government computes inflation through its Consumer Price Index. Here is a graph comparing the Consumer Price Index with what's been called the Higher Education Price Index. It shows that annual inflation of educational costs is about twice that of ordinary inflation.
Even though this diagram is a few years old, the same trend continues to this day. Education costs now, in 2014, are 12 times what they were 35 years ago. Ordinary inflation, by contrast, is less than 4 times what it was 35 years ago.
So if you are a parent thinking of saving for your children's education, you'll need to invest your money where the return stays well ahead of ordinary inflation. This can be a challenge.
Because money is such a major concern for most of us in pursuing college and university degrees, we use our cost index not just to describe the approximate annual cost of degree programs and for online college price comparisons, but also to compare the costs of different types of programs. This will help you to determine whether you are getting value for your dollar. Higher education costs are extremely variable, and paying more doesn't necessarily get you more.
The data above describe traditional on-campus tuition and fees. Price estimates use information from the U.S. Department of Education and are calculated based on one year, full-time student status. Full-time status is considered 24 credit hours per year (usually 8 courses over 2 semesters) for undergraduate students and 18 credit hours per year (usually 6 courses over 2 semesters) for graduate students.
School tuitions and fees, and national averages, are adjusted to account for projected inflation up to 2016. Note that these costs do not include housing and food, which can add considerably to costs, especially if you need to live on campus and pay for a meal plan.
When comparing prices, every detail matters. Some schools utilize quarter credits instead of semester credits. To find out more about quarter credits and how they affect price, read our article Quarter Credits? --- Quarter Credits versus Semester Credits.