Annual College Costs 5 years from now

[Coronita]

In about 5 years from now, college will be something my kid will be considering. Starting to do some research on the costs of tuition + overall cost (including room and board)… Just getting a rough guessimate on how much various options will cost, assuming no way to qualify for financial aid and no merit based scholarships reserved for superstar… Worst case scenario….

Source
https://www.collegesimply.com
Assumption: Annual increase in cost of college is roughly 5% per year

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Ouch!

Seems like the cost of college has gotten out of hand. Not saying it’s going to be a consideration, but LOL on the the cost of private schools. When I first started my kid’s 529k account more than a decade ago, I was joking that by the time my kid is college bound, 4 year private school tuition+room/board will probably slightly less than 1/2 million …. I guess I wasn’t that far off.

If things are bad now, my sibling is going to flip if they want to send their kids to a pedigree college. 15 years from now, if average annual cost of college continues to be around 5%, is going to be around $620k. And they have two kids…. lol.

For those that can’t see the eyechart.

*Community college tuition is about $2k/year

*Cal State tuition is roughly $6k/year.
With room and board,its roughly $22k/year
(for example at San Luis Obispo)

*UC school tuition is roughly $13k/year.
With room and board, it’s roughly $36-8k/year

*Private school tuition is around $46-57k/year
With room and boaard, about $72-77k/year

College cost increases annually roughly 5% per year.

5 years from now, 4 years at private schools will ring in at slightly below $400k, and 4 years at UC will be slightly below $200k.

15 years from now (if the 5% annual increase continues), 4 years at private schools will ring in at around $620k.

[Hobie]

Merry Christmas Flu.

The privates tend to get the kids graduated in 4 years while our UC’s and State’s tend toward 5 years due to overcrowding.

Also, those college cost sites tend to underestimate some of the costs. Travel costs are more if your kid flys back east several times a year.

And if there is not an airport close by. If you go to Colgate in NY, for example you have another 1hr drive on top of flight–in snow. And car rentals don’t rent to under 25year olds. (generally)

Sock away a few thousand for Spring Break’s in tropical locations. Greek fees and required clothing. I have a daughter too and need to have a line item for clothing budget 😉 Parking, and summer storage fees.

And when they are out of dorms and in a swanky apt those leases are year to year so it is fun to pay rent for an empty apt during summer vacation. I did have to pay $$$ for the taj mahal pad for my darling daughter for a year as it was closest to school and living with her friends.

One more thing. Each kid is different and needs to find the right ‘fit’ for a college. Totally different vib at each school that us parents don’t fully get. Your kid will let you know though. So while we may favor a certain school, be prepared for a totally different school the kid wants.

Of course, you will be lucky if your kid is engaged during the application process. Some kids are totally immersed while most everyone tends to be lazy and rely on parents to sort it out.

In person visits are worth the time and expense. Those tours and the $100/school application costs are just another hidden cost along the way.

Expensive, yes but it fun to see them grow up.

As a side note, my thoughts are anything other than a professional school ie. nursing, engineering, IT it just doesn’t justify the tuition expense. Use that money for house or investment.

The university experience is worth it for social growing but not premium school for fill-in-the- blank STUDIES degrees.

As long as student loans remain not dischargeable, college will most likely follow your 5% annual increase.

[spdrun]

Greek fees? LOL! Frats/sororities are for jocks and basic girls … they’re a sucker’s bet.

Move to NY state for a year before their HS graduation, send them to a CUNY or SUNY school. $7000/yr tuition, less with financial aid, and they can find housing for about $1000/mo even in the city if they share. Much less if they go somewhere like New Paltz (beautiful small town in the foothills of the mountains).

[Coronita]

Merry Christmas to you too. Hobbie.

Good point about state school being able to finish in 4….kid, you’re finishing in 4…..

Where I went to school on the east coast, tuition was high, but housing was cheap. And even now property value hasn’t gone anywhere. If my kid stays in CA, I think we have most of CA covered the second half of the college. The exception would be Davis or Obispo. The first half, for social reasons, probably is better to stay on campus. I don’t think the top rsnk colleges are my kid’s cup of tea too. But I included them for a budgetary purposes.

With 5 years left, contributing $2000/month the 529k that I started to do last year, and with about 5% average return (I rebalanced recently reduce the domestic stock concentration to something more conservative), I think we can just about make it to about $360k without tapping any custodian non-college accounts or my own assets/funds. That should put us somewhere in the category between a UC school and a private school, without needing to stretch that much. Anything less expensive will be just money left over that my kids kid can use or my cousins or both.

Good thing I started really early and let drip monthly drip investing, tax efficiency, compounding run its course over decade. I didn’t even notice the extra monthly contributions, but it paid its way forward. Didn’t realize how crazy educational costs have become. And it’s unlikely we would have been successful in hiding assets to qualify for financial aid, short of moving everything offshore…. Shit is expensive these days.

[spdrun]

Do you need to “hide assets” to qualify for financial aid? Some schools are moving to income-based aid where the majority of students get something.

[evolusd]

First, for Pete’s sake please change the cell format to accounting. The finance nerd in me is having an anxiety attack.

Second, don’t you think at some point this government-guaranteed debt funded increase in college pricing will come to an end? Maybe not in the next 5 years, but it seems the path we’re on is unsustainable.

[Hobie]

On-line classes are the game changer. As soon as we start hearing about students getting good jobs with an online degree at a fraction of price, liberal arts colleges and others will close fast. Of course you miss the full live aboard college experience but we will probably see some kind of blend of online with classroom course work.

The biggest obstacle is the education system itself. They will resist to the bitter end. It will be interesting to watch the flow/trend of future grant money.

There will be big political pushback from the indoctrination factor. just sayin’

[spdrun]

Yeah, yeah, online classes. They don’t get you into a good law school, don’t get you into a medical school, don’t get you into Ph. D. programs, what’s the point? They don’t get you in-person networking or research opportunities either. Also, why bother, considering graded online classes are similarly priced to a state/community school in a state that gives a shit about public education, not football.

We’re designed to communicate and network in person, not sit isolated, staring at a stinking screen. Do we really want to create a world of even more isolated, depressed, socially inept, frustrated techbros? Why do you think that suicide and opiate abuse rates are going bananas recently?

Like it or not, part of college is the experience of living on your own for the first time, meeting other people, partying, talking to professors in person, helping other students, schtupping like rabid rabbits…

It’s not a question of indoctrination (no matter how much anti-intellectuals like to think it is) as much as a matter of socialization.

[Coronita]

[quote=evolusd]First, for Pete’s sake please change the cell format to accounting. The finance nerd in me is having an anxiety attack.

Second, don’t you think at some point this government-guaranteed debt funded increase in college pricing will come to an end? Maybe not in the next 5 years, but it seems the path we’re on is unsustainable.[/quote]

I am sorry about the spreadsheet format. that’s why I am an enginerd. Things like finish and polish escape me.

for everyone’s say, I hope something changes, because I agree this is unsustainable.

[Hobie]

On line classes are everywhere now. Even at your favorite CUNY! The rub is they are charging full price now. Just like any new product price will be high until more competition steps in. It is happening fast.

Kann Academy is free and is the perfect model for online presentation, at least for some subjects.

I can view Richard Feynman lectures for free. Point is online provides access to the best professors and teaching as we have more choices than some new professor or a teaching assistant.

Agree, still need live aboard experience.

[spdrun]

Feynmann has been dead for 30-some years … kind of hard to ask him for clarification. Also, physics have evolved since his death. His lectures are awesome, but not the be-all and end-all of physics education in 2019-20.

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