This article originally apopeared on the Motley Fool.
We hear a lot about how college is expensive, but many folks don’t realize quite how costly a degree can be these days. According to the College Board, the average cost of tuition and fees for the 2016-2017 school year looked something like this:
- $9,650 for in-state public colleges
- $24,930 for out-of-state public colleges
- $33,480 for private colleges
Of course, that’s just one piece of the puzzle. Room and board — an oft-necessary component of college attendance — averages $10,440 at public colleges and $11,890 at private ones.
When we look at these costs, it’s easy to see why so many low- and middle-income families struggle to pay for college. But for a large number of higher earners, most universities are out of reach as well. According to research by the Institute for Higher Education Policy (IHEP), even families earning over $100,000 a year can’t afford nearly 60% of U.S. colleges.
Now IHEP defines affordability as the means to pay for college after saving 10% of one’s discretionary income for the 10-year period leading up to college, combined with earnings from a student working 10 hours per week during college. Given that most folks are advised to save 10% of their income for retirement, setting aside another 10% for college is a pretty tall order. It’s therefore demoralizing to learn that even those who manage to hit that threshold still wind up falling short in terms of being able to afford most learning institutions.
That said, just because some folks might very well be saving 10% of their income for college doesn’t mean that they’re saving in the most efficient manner possible. And that could spell the difference between affording college or winding up with a ridiculous pile of debt for privilege of having a child attend the university of his or her choice.
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