"Life Insurance"
College Planning
The Impact of Inflation on College Costs
Unfortunately, college costs have been rising at a faster rate than the general inflation rate. For the 12 months ending September 2010, the inflation rate was about 1% (source: Consumer Price Index; CPI-U; October 2009 – September 2010). For a similar period of time, tuition and fees at four-year colleges increased an average of 4.5% at private nonprofit colleges and 7.9% at public colleges (source: The College Board Trends in College Pricing 2010). Over the past decade (2000-2001 to 2010-11), total in-state tuition and fees in inflation-adjusted dollars at four-year public colleges have increased an average of 5.6% per year, while tuition and fees at private nonprofit four-year colleges have increased an average of 3.0% per year (source: The College Board Trends in College Pricing 2010). Failing to consider the impact of inflation on college costs could undermine your ability to provide for your child’s education.
Consider the funds that may be needed when an 8-year-old child is ready to attend college in 10 years...
| Today's Average Annual Cost | Average Annual Cost in 10 Years College Inflation Rate: |
||||
|---|---|---|---|---|---|
| 3% | 4% | 5% | 6% | ||
| Public School: | |||||
| Resident Student* | $16,140 | $21,691 | $23,887 | $26,290 | $28,904 |
| Commuter Student** | $7,605 | $10,221 | $11,255 | $12,388 | $13,619 |
| Private School: | |||||
| Resident Student* | $36,996 | $49,716 | $54,750 | $60,258 | $66,249 |
| Commuter Student** | $27,293 | $36,380 | $40,394 | $44,457 | $48,878 |
*Includes tuition, fees, room and board; in-state residency is assumed for public schools.
** Includes tuition and fees only.
Source: The College Board Trends in College Pricing 2010
| Do You Know... | the value of an investment in higher education? |
|---|---|
| According to the College Board’s Education Pays 2010, full-time workers ages 25 and older with a bachelor's degree earned a median income in 2008 of $55,700, almost 65% more than the $33,800 earned by a full-time worker with only a high school diploma. Those with master’s degrees earned a median income of $67,300, which rose to $100,000 for those with a professional degree. |