How to Prepare for the High Prices of Tuition
Every university in the United States provides an array of degrees and programs to prepare students for their lifelong careers. Unfortunately, not one of these degrees comes at a low price. At each university, tuition costs rise annually along with the costs of textbooks and dormitories.
At Ivy League schools such as Harvard and Princeton, the price of classes only is at $40,000 per year. State universities such as Arizona or San Francisco charge approximately $5,000 per semester for a set of full time units. These are just the minimal fees. An extra $5,000 to $10,000 is added for room and board as well as cafeteria privileges.
Let’s estimate the yearly cost of an average institution such as UCLA for a resident applicant:Many parents begin a fund for the higher education of their children as soon as their babies are born, but even starting early the task is rigorous. Universities between Ivies and States still range between $10,000 and $20,000 per year for tuition. University of California in Los Angeles charges $14,000 for mandatory resident fees, but this price is more than doubled for out-of-state students at a baffling $36,000, nearing Ivy League prices. There is no way to predict where your child will pursue their academic career and as a parent you will likely push them towards the best. This leaves you with a pressing financial responsibility to provide the best for your child, and when the time arrives you need to be ready to sign the check!
|Room & Board:||$12,000|
|Miscellaneous (health fees, etc.):||$2,000|
|Estimated Total x 4 Years:||$112,000|
If you decide to save as soon as your child is born, you have to save about $6,000 annually to raise $112,000 over the course of 18 years. In some cases, parents only save for the duration of their child’s high school years. This means saving $28,000 a year over the course of 4 years. $28,000 a year results in only $2,000 a month.
The most fearsome aspect of tuition is the inconsistency of what to expect. Having two kids immediately doubles the amount of costs, but variations such as attendance of community college versus Ivy League can significantly alter it. These are the questions to consider when adjusting your savings plan for tuition payments. All in all, having $100,000 tucked away for university spending needs looks like a comfortable position to be in for you and your children. This could be a flexible amount for a given household with two kids:
Child 1 – Community College transfer to UCLA
|Community College Fees & Tuition2 Year Program||$2,000|
|UCLA Tuition & Fees2 Years||$56,000|
Keep in mind also, that many college Juniors and Seniors do not live on campus, but rather pay for their own apartments and supplies. This may cut your $56,000 down to $45,000, which is a transfer student perk.
Child 2 – Princeton Attendee with a Scholarship
|Room & Board:||$13,000|
|Miscellaneous & Textbooks:||$3,500|
|4 Year Total Fees:||$226,000|
|Estimated Scholarship Discount:||50% Tuition – $80,000|
$202,000 is exactly $100,000 over the limit that your savings have provided you with, but saving up $200,000 in total is a lot of work. This is where automatic saving is crucial for the benefit of your children and your wallet. Remember that when your child begins their college career, you have each of the four years to save for the remainder of the university tab. Also, keep in mind that there are scholarships and loans available that can help both you and your child. Once your child is accepted at a university, you should have savings ready for at least the first year of tuition and fees. Assuming the remainder you have left to pay is that same $102,000, you have two years to raise it at $51,000 to save per year. Every second can be spent saving just a little at a time in order to be ready to pay the high prices of tuition, but it’s worth it for every second spent seeing your child fulfilled, successful, and happy.
Now that you’ve begun to save for a college career, all you have to worry about is your kids passing those SAT’s with flying colors!