Save Money by Attending Community College

Reprinted with permission from the Community College Transfer Guide

Four-year public colleges are generally less expensive than four-year private colleges. In-state public colleges are generally less expensive than out-of-state public colleges.

Tuition reduction programs (which reduce or eliminate tuition depending on your family’s income level) and financial aid may allow you to attend a more expensive college. There are two categories of financial aid—scholarships and grants, which you don’t need to pay back, and loans, which you do.

College may be more affordable than you think. But figuring out in advance exactly how much your college education will cost isn’t easy for three reasons:

1. Sticker prices vs. net prices

2. Average net prices vs. your price

3. How long you’ll be in college

Sticker prices vs. net prices

If you walk into a car dealership to buy a car, you’ll see a sticker price (cost) on a car’s window or windshield. That’s not the price you should pay for the car. Instead, through negotiation, you can get a lower price. Similarly, college tuition costs and fees have a sticker (published) price and a net price. Try not to pay the sticker price here either. Many students pay the sticker price because they are not aware of all the sources and amounts of grants and scholarships available to them that can reduce college costs.

Sticker prices

According to the College Board, for the 2009-2010 school year, the national average sticker (published) price for tuition and fees for one year of college was:

$2,544 at two-year public colleges

$7,020 at four-year public colleges and universities (for in-state residents)

$26,273 at four-year private colleges and universities That’s just one year’s sticker price.

Net prices

Now look at the net prices. The national average net price for tuition and fees for that year was around:

$0 (actually students received enough in grant aid and tax benefits to not only cover tuition and fees but also have $500 to spend towards living expenses) at two-year public colleges

$1,600 (a $5,400 drop) at four-year public colleges and universities (for in-state residents)

$11,900 (a $14,400 drop) at four-year private colleges and universities

That’s quite a difference. As you can see, going to a community college or a four-year public college or university can cut your costs considerably.

What are net prices? Net prices are the sticker prices less any grants, scholarships and higher education tax benefits (tax deductions and tax credits). Net prices show the true out-of-pocket costs.

Grants are financial aid, based on need, which you don’t have to repay. Scholarships are given for all levels of profiles and talents (including special academic, artistic or athletic abilities) and don’t need to be repaid. Scholarships can also be need-, merit- and affiliation-based. (Of course, loans, the other main type of financial aid, do need to be repaid.)

Average net prices vs. your price

Since average net prices vary by region, school and tax benefits, your cost might be very different. Also, it’s difficult to predict your net price in advance because even within the same four-year college or university, students pay different net prices depending on their family income and resources, eligibility for grant aid, academic qualifications and other factors. However, average net prices and average sticker prices at least give you a range of dollar amounts that you can use as rough guidelines.

Other costs

Besides tuition and fees, books cost on average around $1,000 per year as do transportation costs. Room and board costs average around $7,500 per year (living at home can save money here).

How long you’ll be in college

Yearly costs really add up so it’s important to know for budgeting purposes when you’ll graduate. Keep in mind that only 38% of students earn a bachelor’s degree within four years of entering college. Extra years in college also mean extra time for education inflation to increase costs.

If you transfer to a four-year college as a junior, you can possibly graduate after just two years at a four-year school, shaving years off the average college stay.

That’s why you really want to make your community college units count. You’ll save time and big-time money at a four-year college if more of your community college units transfer and fulfill requirements. And with belt-tightening and cutbacks at four-year colleges becoming more common, it may be harder to find all the courses you’ll need to graduate when you need to take them (and in the sequence you want). That could lengthen your stay (and cost) at a four-year college. So make the best use of your time at community college to minimize the time and money you’ll spend at a four-year college.

Copyright 2009 Don Silver