As part of Money Smart Week (April 20-27), we’ve sought the advice of two experts on how students can finance their education. Learn more on our special Money Smart Blog.
College costs are on the rise. Average costs for tuition, fees, room and board at public and private colleges averaged $17,860 and $39,518 respectively per year in 2012. This is an increase of 124 percent and 138 percent respectively from 1972 costs.
But is college still worth it? Absolutely! With college graduates earning on average $3 million more than non-graduates over their lifetime, college is an investment that has a great return.
So how can you make the most of your children’s educational investment while managing the costs?
1 Save early. A family saving $1,000 per year from ages 10-18 and earning 7 percent APR on their investments will have $11,000 at enrollment. Starting at birth instead would result in $36,000.
2 Consider costs. Think carefully about the costs of each college. For some students, community colleges, which average $2,690 in tuition and fees, can be a fantastic bargain to start.
3 Build a budget. The number one reason for college dropout is financial pressure. Visit the resource page at econcouncil.org to create a customized budget with your student.
Tracy Frizzell, Economic Awareness Council – Young Illinois Saves
Looking at financial aid
College is a strong investment in your future, but with the rising costs of college, how can the average Illinois family afford it?
Illinois residents have a valuable financial aid resource based right here. The Illinois Student Assistance Commission is dedicated to giving Illinois residents every opportunity to pursue a post-secondary degree. ISAC administers more than $370 million need-based grants and scholarships and provides one-on-one guidance for students and their families.
To get started, make sure to explore the various career paths on whatsnextillinois.org and visit isac.org to connect with one of the ISACorps members who will provide free assistance in applying for student financial aid and navigating the college-going process.
As students are deciding on which college to attend, they should examine their award letters closely.
1 Grants and scholarships. Determine if they are renewable or a one-time award. If renewable, make sure to know what the requirements are for each year.
2 Student loans. Student loans can be awarded from different sources and have different interest rates, repayment schedules and amount limits. Read and understand the details of each student loan before accepting it.
3 Out-of-pocket cost. Determine what will be the total out-of-pocket cost after completing the whole program, not just part of it.
Abel Montoya, Illinois Student Assistance Commission