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Among the many questions students must ask when planning for college, “How much will my degree cost?” is usually high on the list.
It’s a valid consideration. With the cost of college rising exponentially over the last several decades and student loan debt in the U.S. totaling $1.77 trillion as of 2023, students and their families must ensure they understand all costs associated with attending college and explore all avenues for paying for a degree.
With the help of independent college counselor Dana Marvin, this article breaks down the average cost of college at public, private, and for-profit schools, the factors influencing college tuition prices, how students can pay for college, and alternatives to a four-year degree program.
In the U.S., there are two types of colleges: public and private. Public universities receive state and federal funding to help subsidize the costs of providing education, particularly to residents of the state where the school is located. Private universities don’t receive government-related funding, relying on tuition, endowments, investments, and other revenue sources to cover operating costs.
On average, tuition rates are higher at private universities than at public institutions, although exceptions exist. For example, annual in-state tuition at the College of William and Mary in Virginia is $23,812, the most expensive public university tuition in the U.S. Comparatively, at Southern New Hampshire University, a private institution, annual tuition is $16,450.
Tuition rates at public universities also differ by state. Vermont has the highest average annual tuition for four-year public institutions ($17,083), while Florida has the lowest ($4,463).
Student residency status
Another factor that contributes to tuition rates at public schools is where a student’s primary residence is. State residents receive reduced tuition rates at public universities since their taxes have helped support these institutions. Public universities usually charge out-of-state students a higher tuition rate because they pay taxes in a different state.
Private schools, which don’t receive state funding, charge students the same tuition, regardless of residency.
According to the Education Data Initiative, in-state students can expect to pay, on average, $38,496 for a bachelor’s degree, while out-of-state students will pay, on average, $54,183.
However, students considering earning a degree online should note that many public universities have started charging remote students the same tuition rate, regardless of residency. Some schools have established regional reciprocity agreements, in which students from specific states or regions all pay the same tuition.
Non-profit vs. for-profit institutional status
A school’s status as a non-profit or for-profit institution can also impact how much tuition is.
At a non-profit college, all revenue must be reinvested into the institution, including paying faculty and staff salaries, campus and online infrastructure, student services, operations, and more. All public universities and most private schools in the U.S. are non-profits.
Meanwhile, as the name implies, for-profit schools are designed to turn a profit so they can pay investors and shareholders. Because for-profit schools aren’t required to reinvest revenue into the institution, they often invest less in their students than non-profit schools. Many career, technical, and vocational schools in the U.S. are for-profit. For-profit schools are all considered private, as they don’t receive state or federal funding.
The difference between tuition at a private non-profit college and a for-profit college can be significant. According to the National Center for Education Statistics (NCES), in the 2021-22 academic year, average tuition was $37,222 at four-year non-profit private colleges and $15,518 at four-year for-profit private schools.
However, it’s important to consider the value and quality of education students get at different types of institutions. For-profit colleges are driven by the bottom line, not student outcomes, which can affect the quality of education students receive. Students considering a for-profit college should carefully review the school’s accreditation status, retention, graduation and job placement rates, and curriculum to ensure they receive a worthwhile education.
Degree level
Tuition also varies based on the type of degree a student is earning. Because courses for associate and bachelor’s degrees tend to require fewer resources and can enroll more students than specialized graduate courses, per-credit tuition is usually lower for undergraduate students than it is for graduate students.
Additional College Costs
Room and board
For students who are attending college in person and are living on campus, room and board is another cost to factor into their overall budget. Room and board include lodging and utilities in a school’s residence halls and meals in their on-campus dining facilities. In the 2021-22 academic year, room and board at four-year colleges averaged $12,780.
Transportation
Other students who attend college in person choose to live on campus and commute. While this may be cheaper than living on campus, based on the cost of living in a given area, students will still have costs associated with traveling to campus, including purchasing a vehicle, paying for gas, maintenance, and on-campus parking. Students who plan to take public transportation should consider the weekly or daily cost of train, bus, or subway rides and determine if their school or public transit agency offers student discounts.
Personal technology
All students need reliable hardware and software to complete a college degree, although this is particularly important for online students. Before starting a degree program, students should assess their technology needs and purchase any necessary equipment, such as a personal computer, microphone, and webcam. They should also confirm that they have reliable high-speed internet, as disruptions in internet access can impact a student’s ability to attend virtual classes or submit assignments on time. Students should check if their school offers deals or discounts for technology purchases.
Books and learning materials
Students also need to budget for books and other learning materials they may need based on their degree program. According to the Education Data Initiative, undergraduate students at four-year institutions spent an average of $1,465 on textbooks during the 2020-21 academic year. However, students can save money by renting books, finding less expensive online versions, or re-selling books after the term ends.
Financing a College Education
There are many ways to pay for a college degree, and most students use various methods to cover their costs.
Students should start figuring out how they will pay for their degree program by speaking to a financial aid counselor. Because there can be so much variation in cost and financial aid resources between schools, talking to someone specifically at your institution is the best way to get accurate information.
Federal student loans
One of the most common ways students pay for college is with federal student loans. The U.S. Department of Education operates the nation’s student loan program, which lends undergraduate and graduate students money to pay for tuition and other expenses. There are different types of loans available based on student need and degree level, including subsidized, unsubsidized, and PLUS loans. Congress sets interest rates and repayment terms for federal student loans. Students must repay their federal student loans with interest, although there are some student loan forgiveness plans currently available. Students apply for federal student loans using the Free Application for Federal Student Aid (FAFSA).
Private education loans
Students can also borrow money to pay for tuition and other education expenses from private lenders such as banks, credit unions, or other agencies. Unlike federal student loans, terms and interest rates for personal education loans are determined by individual credit and market trends.
Because of this, private student loans are often more expensive in the long term than federal student loans. All money students borrow through private education loans must be repaid with interest.
Work-study
Work-study refers to a school-affiliated job in which the federal government pays the student’s wages as part of their financial aid package. Funding for work-study positions is awarded based on student need. In most cases, students who have work-study funding must secure a job on their own through their university. Students don’t have to repay the money they earn through a work-study job, and this type of financial aid is available to undergraduate, graduate, and professional students.
Scholarships
Most schools offer scholarships to students based on financial need or individual achievement. Scholarships can range from a few hundred dollars to completely covering all tuition. For need-based scholarships, students may have to complete the FAFSA, while eligibility for merit-based scholarships is usually determined by a student’s academic and extracurricular record. Scholarships are considered gift aid, which doesn’t require repayment. Students should also explore opportunities for scholarships beyond their school, including awards from non-profits, professional development organizations, religious and community groups, and more.
Grants
Like scholarships, grants are gift aid that doesn’t require repayment. There are two types of grants available through the federal financial aid program. Undergraduate students who display exceptional financial need may be eligible for Pell Grants, while students pursuing a degree and career in education may want to explore the TEACH Grant. Individual schools may also offer their own grants based on student financial need or merit.
Fellowships and assistantships
This type of financial support is most common among students working on an advanced degree, like master’s or doctoral students. Schools and external organizations offer fellowships to help support graduate students’ research or advanced study. Fellowships may or may not have work requirements attached to funding. Meanwhile, assistantships usually provide students with stipends in exchange for working as a teaching or research assistant. The money students receive through fellowships and assistantships doesn’t have to be repaid.
Employer tuition assistance
Students planning on working while enrolled in college should find out if their employer offers tuition assistance benefits. Specifics vary by individual employer, but in general, employers who provide this kind of benefit will reimburse students for some or all of the costs associated with a completed college class.
Payment plans
For students who are paying for their degree out of pocket, many schools allow students to enroll in a payment plan. This way, students pay tuition in installments throughout the term instead of in one lump sum at the start of the term. While this won’t lower the overall cost of tuition for an online college, it can help decrease the cost burden on students.
According to independent college counselor Dana Marvin, there are several ways students and their families can be strategic about paying for a college degree.
The first step is being realistic about what you can afford. “For many students and parents, name-brand means the best, but this isn’t always the case when it comes to college,” she says. “The best school is the one that fits the student’s particular needs, including what they can afford. If attending a certain pricy college will put a family into major debt and require potentially dangerous financial decisions, like taking out a second mortgage, it may mean a hard conversation of choosing a different school.”
For students and families who need financial aid to help cover the cost of college, Marvin recommends starting with gift aid that doesn’t have to be repaid. “Before accepting any loans, look into every other way to fund your education, including all avenues for scholarships and grants,” she says. “This type of funding can either lower the loan amount a student needs to borrow or, best case scenario, cover the program’s cost completely.”
Marvin also advises students and families who need to borrow money to pay for school.
“First, take out what you need and nothing more,” she says. “For example, if you’re eligible to take out a loan for $12,500 per year but only need $8,000, there’s no need to take out a loan for the extra funds. Every dollar you take out in a loan will not only be paid back but with interest.”
To that end, Marvin recommends getting a jump-start on student loan repayments. Marvin says, “Most people think you have to wait until after you’ve graduated to repay your loans, but you can begin paying them off as soon as they’ve been disbursed. Even paying off a few hundred or thousand dollars before finishing your degree can make a huge difference to those post-graduation loan amounts.”
Lastly, “If you qualify for federal loans, take those before looking into private loans,” Marvin says. “Federal student loans are preferable to private education loans because qualification doesn’t depend on a credit score, and there are income-driven repayment plans and different ways to determine how much per month the student will pay once they have graduated.”
Determining the ROI of a College Education
The cost of college isn’t just about how much students will pay for their education. Students must also consider what they will get in return for earning a degree.
The higher the level of education a student obtains, the more their earnings will increase, according to data from the Bureau of Labor Statistics (BLS). For example, the median weekly earnings for individuals with bachelor’s degrees is $1,432, compared to $853 for those whose highest level of education is a high school diploma. Individuals with a professional degree can expect to earn a median weekly pay of $2,080.
The more education an individual has, the more likely they are to be consistently employed. As of 2022, the unemployment rate for individuals with a bachelor’s degree was 2.2%, compared to 4% for those with only a high school diploma.
Unemployment is lower for individuals with a degree because many jobs in the U.S. require a college education. The BLS reports that there are over 300 occupations that typically require at least an associate degree for entry-level positions. College degrees, particularly at the undergraduate level, will prepare students with transferable skills to apply to many different careers, opening up additional job opportunities.
However, students need to consider that employment options and salaries vary both by industry and within industries themselves. When choosing an area of study and a school, students should research factors like projected employment and average annual salary to help them calculate their return on investment in their college degree.
Other Post-Secondary Education Options
Students should also determine whether a college degree is the right educational path for their desired career. While many jobs require a degree, there are also employment opportunities, particularly in skilled trades, available to students who have completed certificate or diploma programs, bootcamps, apprenticeships, or on-the-job training. These educational experiences are often less expensive than a full college degree.
For example, individuals interested in working in IT as computer programmers or software engineers may also want to explore bootcamps. These intensive programs, which can last several weeks to several months, provide focused training on coding and web development skills at a fraction of the price of a degree.
Students with a college degree who want to pivot to a new career or develop advanced skills in their current field may find that earning a certificate is a more cost-effective way to achieve their goals than starting a whole new degree. Like bootcamps, certificate programs typically cost less than a full degree and can be completed in a few weeks or months.
Interested in a degree instead?
Learn more about online degrees, their start dates, transferring credits, availability of financial aid, and more by contacting the universities below.
