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Cost of Education: For Students

Paying for College

There are many factors to weigh when choosing a college, with cost being just one of the many considerations. Unfortunately, the price of college depends on a variety of factors in itself, most importantly the type of school and location. The good news is there are plenty of resources to help you understand the true cost of college and how to think about planning your college budget. This article provides a brief introduction to the various costs and ways to pay for college, in addition to understanding the difference between colleges’ “sticker price” and affordability.

College Cost Breakdown

Tuition is typically the largest portion of your costs, but students should also consider budgeting for room and board (housing and food), books, and transportation. These costs will vary significantly based on what type of school you go to, and whether you are living on campus or off. The following chart shows average budgets for undergraduate students enrolling in the 2011-2012 school year:

Average Estimated Undergraduate Budgets, 2011-2012


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Type Tuition and Fees Room and Board Books and Supplies Transportation Other Expenses Total
Public Two-year Commuter $2,936 $7,408 $1,182 $1,606 $2,127 $15,286
Public Four-Year In-State On-Campus $8,244 $8,887 $1,168 $1,082 $2,066 $21,477
Public Four-Year Out-of-State On-Campus $20,770 $8,887 $1,168 $1,082 $2,066 $33,973
Private Nonprofit Four-Year On-Campus $28,500 $10,089 $1,213 $926 $1,496 $42,224

If we make the assumption that costs remain constant over the pursuit of your degree (they often go up), and you graduate on time, your total expense would be:

Type Cost
Public Two-Year Commuter: $ 30,518
Public Four-Year In-State On-Campus: $ 85,788
Public Four-Year Out-of-State On-Campus: $ 135,892
Private Nonprofit Four-Year On-Campus: $ 168,896

Financial Aid

While college costs can be intimidating, the average undergraduate often pays considerably less than the published tuition amounts. Many people do not have the ability to pay out-of-pocket for post-secondary education. Luckily, there are numerous forms of financial aid that can offset costs and make college more affordable:

  • Grants and Scholarships are types of financial aid that do not have to be paid back. While grants are typically provided based on financial need (such as federal Pell Grants), scholarships are awarded based on merit or specific pursuit. Schools, governments, and organizations are all sources of grants and scholarships, but students must meet eligibility requirements and apply. So while this may be “free money,” you still have to demonstrate need or achievement to receive the funds.
  • Student Loans are just like any other loan, in that you agree to pay back the funds with added interest. These loans have attractive features specific for students, such as low interest rates, and often do not begin repayment until after graduation. Loans fall into two main categories, Federal (Stafford loan) or private (commercial providers such as Sallie Mae). About two-thirds of students graduate with student loans, and the average debt now exceeds $25,000! When researching and taking out student loans, be sure to understand the repayment terms and how this will impact your life after graduation.
  • Work-Study Programs are part-time employment opportunities that allow students to earn money for college expenses. The advantage of an on-campus job is that employers are often more understanding of your class schedule and schoolwork. While the government runs a Federal Work Study (FWS) program, schools also offer their own programs.

Most grants, federal student loans, and work-study programs rely on the Free Application for Federal Student Aid (FAFSA). The FAFSA uses information from your family and school to determine eligibility for various programs.

Understanding Affordability

A college may be much more affordable then the “sticker price” suggests. The cost of private colleges, which have large endowments to draw aid from, can decrease by $15,000 or more after factoring in grants. Despite intimidating tuition prices, financial aid can help make higher education affordable to just about anyone.

Helpful Resources

Choosing a Student Loan

Consumer Financial Protection Bureau’s Choose a Student Loan and Action Guide



College Affordability

U.S. Department of Education - College Affordability and Transparency Center 

College Affordability and Transparency Center

  • Evaluate which colleges have the highest and lowest tuition and net prices.
  • Determine how much career and vocational programs cost.
  • Apply for financial aid.
  • Search for colleges.

The federal government offers a variety of financial aid options that make it easier to get money for higher education. Visit

Managing Your College Money

Credit unions offer a wide range of financial products and services. These products and services include savings accounts, checking accounts, debit cards, ATMs, mobile banking, and much more. To find a credit union near you visit NCUA’s Credit Union Locator.

Learn more from the CFPB about what questions you should ask yourself before making the first step toward your first major financial relationship.

Types of Education Loans

Federal, Private (non-federal), or both?

Are your student loans federal or private (non-federal), or a mixture of both?

If you aren’t sure what kind of loans you have, visit the National Student Loan Database System for Students and select “Financial Aid Review” for a list of all federal loans made to you. Click each individual loan to see who the servicer is for that loan (this is the company that collects payments from you). It’s very important to know your servicer. The servicer might be a different company from the original lender.

Federal loans

  • Typically, federal loans have names such as Stafford, Grad PLUS, Direct, or Perkins.

Private (non-federal) loans

  • Are often issued by a financial institution, a credit union, your school, or another lending institution;
  • Might use names like “private” or “alternative”; and
  • Can be issued by a non-profit entity or state agency.

If you’re not sure whether you have non-federal loans, contact your school’s financial aid office since they may have this information on file.


For Parents and Guardians For Students Financial Aid Going to College as an Adult Borrow for Higher Education