How Much Will College Cost in 10 Years?
It’s no secret that college comes with a hefty price tag. And as the years have flown by, the costs have tended to tick up. So just how much are we talking about when we estimate college costs in the next decade?
We help show you what to expect and share tips for how to start preparing for college costs now.
The Current Cost of College
According to research by the nonprofit College Board, the published 2021-2022 average cost of tuition and fees for a public four-year college is $10,740 for in-state students and $27,560 for out-of-state students. At a private four-year college, the average is $38,070.
These costs, according to College Board data, reflect an increase over last year of $170 for in-state students, $410 for out-of-state students, and $800 for private colleges. So, will that annual rate of increase continue? And how much will college cost in 10 years?
Change Expected in Tuition Annually
There are a lot of variables that could affect the cost of tuition in the future, making it hard to predict. But tools exist to help lessen the guessing game, such as this college cost projector by Vanguard or this college cost calculator from College Board. For example, if using an average tuition inflation rate of five percent, we could see the average cost of attendance for in-state four-year program swelling to more than $150,000 in the next 10 years. The NC 529 Savings Calculator takes future college costs into consideration and also helps you estimate how much money you’ll need to save to reach your goals.
If news headlines about the rising cost of college give you heartburn, here’s a little good news. According to Georgetown University researchers, while college costs increased by 169 percent from 1980 to 2019, the trend has been slowing. Average tuition prices over the last year did increase — but at historically low rates due to the pandemic. Some colleges even put a freeze on tuition increases.
While college students (and parents) hope these trends will continue, financial experts predict college costs will eventually need to increase to cover institution budgets. By how much is still anyone’s guess.
Saving with the One-Third Rule
The numbers can seem daunting and make even the most organized parent throw their hands up in frustration. But it’s helpful to note that many financial experts recommend parents plan to save about one-third of future college costs, which will hopefully ease some of your saving anxiety.
The second third of college costs should come from a combination of your income when your child is in college and financial aid they may receive. Most students will get some financial aid when they complete the Free Application for Federal Student Aid (FAFSA). This helps students qualify for grants, scholarships, work-study programs, and federal student loans. Keep in mind that students can and should apply for outside scholarships their senior year of high school as well. These may come from the colleges to which they are applying, local organizations, as well as statewide and national companies.
The final third of college costs can come from the student’s future earnings, in the form of student loans. So, the more you can save now, the fewer loans you and your student may need to take out when they head off to college.
NC 529 Can Help
It’s nearly guaranteed that college costs will continue to increase, and while we can’t say exactly how much college will cost in 10 years, we do know it’s never too early or too late to start saving for college. The NC 529 Plan can help your family prepare for the future with our tax-advantaged program. Earnings grow tax-free when the money is withdrawn for eligible education expenses, including college expenses, apprenticeship programs, student loan payments, and more!
Family and friends also can make contributions to your child’s NC 529 Account on a regular basis or as gifts on special occasions. And, of course, your child can contribute when they start working during summers and after school — giving them the opportunity to make an early stake in their own education.
Opening an account takes just a few minutes and a minimum $25 contribution. Learn more about tax advantages, investment options, and creating an account on our website.