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The Cost of College By Marjolijn Bijlefeld The first, last, and best advice for anyone when it comes to financing a college education is to start early. The sooner students and parents save money the better. But it's never too late. Even if you are in your senior year of high school, with hard work you and your parents can pull together a combination of savings, loans, scholarships and grants, and work-study programs to finance that college education. The annual national survey of college costs prepared by the College Board for the year 1998-99 shows that college tuition and fees rose 4%. But financial aid from federal, state, and institutional sources was available to students at a record level: more than $60 billion, an increase of 6% over the previous year, after adjusting for inflation. However, according to the College Board, much of the increase was in the form of loans rather than grants. Financing tuition is the biggest cost you will face, but it is not the only cost. Money will also be needed for fees, room and board, books, supplies, transportation, and other miscellaneous expenses from clothing to eating out. Personal preferences can often be budget breakers, especially for freshmen students. For example, many students expect to come home once or twice a year yet find they make the trip once or twice a semester. On campus, if students who pay for a dorm meal plan find the food unappealing and begin eating out or ordering pizza often, they can quickly double their food expenses. When estimating expenses, it is important to be realistic and honest with yourself. According to the College Entrance Examination Board, the average cost of private college tuition and fees in 1999 was about $13,664. Public college or university tuition averaged about $3,111 for in-state students (and typically about $5,000 more for out-of-state students). In addition, room and board, books and supplies, transportation, and personal expenses tacked another $7,000-$8,000 onto the annual bill, bringing the total to about $21,424 for private school and $10,069 for public schools. Keep in mind that there are many types of schools, and each comes with a different price tag. Public and private institutions have different tuition rates. Although private institutions traditionally charge the same tuition price for in-state and out-of-state students, their costs tend to be higher than those of public colleges. Public institutions receive portions of their budgets from federal, state, or local governments, and they charge students who are residents of that state lower tuition than nonresident students. Other factors affecting college costs include size, location, and academic programs. In the United States the most accessible form of higher education for students is the community college. Typically these regional institutions provide an associate degree at the end of a two-year program and can be a stepping stone for students to continue their education at a four-year institution. Community colleges are usually funded by appropriations from state and local governments, although a few have foundations or endownment funds. The majority of financial aid funds at the community college level come from federal and state grants and job and loan programs. Liberal arts colleges, state-supported and private, focus on the education of undergraduate students and are smaller than universities. Although they differ greatly from one institution to another, they generally expose students to a broad base of courses in humanities, social sciences, and sciences. The private colleges tend to be higher priced but may also be able to provide more generous aid packages than their statesupported counterparts, where tuition rates are lower. Universities are larger and include a liberal arts college as well as a variety of professional colleges and graduate programs. This varies depending on the individual institution. They offer a greater range of academic choices, with both professors and graduate students teaching classes. Professors at major universities are involved in research, which adds to the academic prestige of the institution. Financial aid often comes from federal and state grants and job and loan programs and is available through the university's office of financial aid. Private research universities include some of the most selective institutions in the country, among them Harvard University ( Massachusetts), Princeton University ( New Jersey), the Massachusetts Institute of Technology, and Columbia University ( New York). These universities are often well endowed and have strong financial aid programs. Technical institutes and professional schools are most attractive to students who have made a clear career decision because these schools emphasize preparation for that specific career.Once you have decided where to go you need to see the projected costs in black and white. The Semester Budget Worksheet (College Entrance Examination Board) will help you estimate expenses for a semester while also projecting income for the same period. Remember, be as realistic as possible and talk to friends or relatives who have been to college to get an honest picture of your needs. SEMESTER BUDGET WORKSHEET  Estimated Expenses for Semester    Tuition $_____    Fees_____    Books/Supplies_____    Rent/Housing_____    Board/Meals_____    Phone/Utilities_____    Clothing_____    Laundry/Dry Cleaning_____    Transportation (carfare, gas, parking, insurance, etc.)_____    Medical/Dental_____    Recreation_____    Personal Expenses_____    Savings_____    Child Care_____    Credit Card Debt_____    Other_____    TOTAL SEMESTER EXPENSES $_____    Projected Incomefor Semester    Money from Parents $_____    Money from Savings_____    Work/Study_____    Other Work_____    Scholarship_____    Grants_____    Loans_____    Public Benefits    (Social Security, Veterans Admin., etc.)_____    Spouse's Wages_____   Other_____    TOTAL SEMESTER INCOME $_____   Note: If your total semester expenses exceed your total semester income, carefully review your spending habits and look for areas where you can economize. The next question becomes how best to finance those costs. It's never too late to save, but there are things that you and your parents can do if college starts in less than a year. First, adults who think borrowing may be an option should check their credit history. Also, any account holder should check savings and investments to ensure the best rate of return. Finally, look into financial aid. Remember, college lasts for several years, and even if you are too late for financial aid the first year of enrollment it may be available for subsequent years. Saving money in advance is the most obvious way to prepare for the cost of college. Many young parents have good intentions but ultimately fail to save for a variety of reasons. Plus, saving money is no longer as simple as it used to be; the art of investing now includes a multitude of financial choices and terms that overwhelm many people. How much should your parents try to save? The answer is, of course, as much as possible. Table 5.1 illustrates what parents should save to have $10,000 available to pay college costs. As the table demonstrates, the amount a family needs to save varies depending on the interest rate and the number of years those dollars have been put aside. If your parents began saving regularly when you were born, they need only deposit a small monthly amount compared to someone who started saving when their child reached age 16. Source: Teen Guide to Personal Financial Management