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Planning Beginner: Education Planning

Introduction to Education Planning Education Planning: Getting Started The College Cost Environment College Still Pays Financial Aid Misconceptions about Your Income Is All Financial Aid a Loan That Must Be Repaid? Are There Really Hundreds of Millions of Dollars in Unclaimed Scholarships? Financial Aid: Determining the Student Aid Index Financial Aid: Contributions from Parental Income and Parental Assets Independent Student Status in Financial Aid Coverdell Education Savings Accounts Qualified Tuition Plans (529 Plans) Summary of Education Planning
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College Still Pays

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College Still Pays

One bit of good news is that college still pays. College is an investment for a lifetime. But does it create earning power? "The resounding answer is yes. Research shows that people with college degrees have more job choices and earn more money," according to the College Board.

Median Income by Educational Attainment of Worker, 2022

For most, college is still affordable

College can be more affordable than most people think. According to the College Board, about half of full-time undergraduates attend a four-year college costing less than $12,000 per year for tuition and fees. The average 2024–2025 costs of tuition and fees are as follows:

  • Public schools for in-state students: $11,610 per year
  • Public schools for out-of-state students: $30,780 per year
  • Private schools: $43,350 per year

Many of these higher-priced schools have grant aid available, making it easier to pay costs. Many who attend two-year colleges pay about $4,000. At the extreme end of low cost, a few colleges charge no tuition or offer all students full tuition coverage through scholarships.

There is a lot of financial aid available

Furthermore, more people are eligible for financial aid than realize it. Many people who would easily qualify for need-based financial aid mistakenly believe that families with incomes over $35,000 are not eligible. According to the College Board, there is currently more than $255 billion of financial aid being awarded. To qualify, a family must pass a needs test that considers not only family income and assets but also the total cost of education for all family members as well. Families putting two or more family members through post-secondary education very often qualify for substantial financial aid despite "high" family income.

Although post-secondary education costs have risen dramatically, the cost of higher education is not out of reach for most families. There are several options available to make higher education possible. Apply for financial aid. Choose a school that is within your family budget (including financial aid). Also, plan early.

Of course, there is a wealth of tax incentives available to help you save on college expenses. Savingforcollege.com lists several here.