For most families looking to colleges, the price tag seems overwhelming. But things are not always as they seem.
This is because about 66% of all full-time students receive aid, which can reduce costs significantly.
For example, Tuition and fees plus room and board average over $74,000 at highly selective four-year colleges. However, according to the new, the average price that families actually pay is closer to $27,000. Research by Vanguard,
At public, in-state schools, the net price the average student pays is actually $14,360 per year—far below the average sticker price of $26,364, Vanguard found.
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“When parents are anchored to these published tuition costs, it can be really discouraging,” said certified financial planner and report author Jonathan Kahler. “These high prices seem impossible.”
In fact, most families pay very little.
what does college really cost
Kahler said it’s not unusual for the most sought-after schools to list total prices of $80,000 or more annually.
“In fact, most students and their families will pay significantly less once financial aid and other exemptions are included.”
net price: Your net price Tuition and fees minus grants, scholarships, and education tax benefits, according to the College Board.
At some private colleges, the average scholarship award exceeds $50,000, the Princeton Review also found, bringing the total out-of-pocket cost closer to $20,000.
The Princeton Review Even Thought About How Much Financial Aid Is Provided to Colleges And how satisfied the students are with their package.
When it comes to granting scholarships and grants, it is often the most expensive private schools that have the most money to spend, both reports found. ,These are the private and public colleges offering the highest aid packages,
The US Department of Education awards about $120 billion each year to help students pay for higher education. And beyond federal aid, students may also be eligible for financial aid from their state or college.
But students must first fill out the Free Application for Federal Student Aid, or FAFSA, which works as follows: door For all federal funding, including loans, work-study and grants. Still, fewer students are applying and most say it’s because they didn’t think they’d qualify, studies show.
Still, families earning up to $275,000 may be eligible for some assistance, Vanguard found.
“Depending on the situation, depending on the school, very high-income families still qualify for some financial aid, especially if they had more than one student in the school at the same time,” Kahler said.
Overall, the high school class of 2021 left an estimated $3.75 billion in Pell Grants on the table by not meeting the FAFSA, according to another report From the National College Attention Network.
how much should you save for college
Kahler also said that you can start as early as a 529 College Savings Plan, you’ll be better. Not only can you get a tax deduction or credit for contributions; Income grows on a tax-advantaged basis and, when you withdraw the money, it is tax-free if the money is used for: qualified education expenses such as educationFees, books and room and board.
When factoring in inflation and your time horizon, a few simple savings goals can help.
“If you’re starting out at childbirth, if you can save about 3% of income per year, that will generally get you on track.”
However, starting later, families should “play catchup,” Kahler said.
The average savings rate will increase to 4.7% for parents who start saving when their child is 5 years old and to 8.2% for parents who start saving when their child is 10 years old Let’s start.