Understanding the Cost of College

Loans, Student Loans
Understanding the Cost of College

There are a few things in life we can count on: Beyonce will release an epic surprise album, your wallet will get stolen in a bar, and the cost of college will go up. But it’s not as clear what those costs include or how much of your school’s sticker price you’ll end up paying.

Knowing your school expenses can give you a better sense of your potential student loan burden. About half of college freshmen in the U.S. underestimate the amount of debt they have, according to a 2014 Brookings Institution report. That could keep you from using smart strategies, like paying off accumulated interest before it’s added to your balance or signing up for the right loan repayment and forgiveness programs.

We’ve laid out the average costs of several types of colleges, the amount you’re likely to pay and how to pay for college so you graduate without overwhelming student loan debt.

How much does college cost?

Colleges really do charge a lot more than they used to. From the 2002-03 school year to 2012-13, average yearly tuition, room and board at public undergraduate institutions rose 39%, according to the National Center for Education Statistics. It went up 27% at private nonprofit colleges.

But the type of school you choose makes a big difference in the amount you pay. Here’s the average yearly cost of tuition, fees, room and board in 2012-13, again thanks to the National Center for Education Statistics.

Type of institution
Total cost
Tuition and fees
RoomBoard (Meals)
Public two-year
$8,928
$2,792
$3,247
$2,889
Public four-year
$17,474
$8,070
$5,241
$4,163
Private nonprofit four-year
$39,302
$28,746
$5,844
$4,712
Private for-profit
$23,158
$13,766
$5,738
$3,653

How much will I end up paying on average?

Those numbers aren’t easy to stomach, but it’s unlikely you’ll pay the total amount for the school you choose. Fill out the Free Application for Federal Student Aid, known as the FAFSA, to receive financial aid that could cut the cost.

The FAFSA determines the amount of money your family can provide to pay for college. It also qualifies you for federal, state and school grants, which you don’t need to pay back; federal student loans; and work-study to cover the rest of the cost.

You’ll get certain types of financial aid, including Pell Grants and subsidized federal loans, if you have especially high financial need, which is calculated by subtracting your expected family contribution from the school’s cost of attendance. Prioritize applying to colleges that pledge to meet your full financial need; check the schools’ websites or call their financial aid offices to find out if they do.

To get a sense of what you might pay, check out the average out of pocket net price in 2011-12 and the average loans, grants and work-study funds students received. Net price is the amount you’re charged after taking into account the grants and scholarships you’re eligible for.

Type of institution
Out-of-pocket net priceLoansGrantsWork-study
Public two-year$9,900$1,400$3,400$100
Public four-year$11,800$4,500$5,200$200
Private nonprofit four-year$18,100$6,200$15,600$700
For-profit$15,000$8,100$4,100$100

What will particular schools cost me?

Net price can vary widely from school to school. Each college or university has a net price calculator on its website, which will estimate how much you’ll pay based on your financial profile.

You can expect to cover the net price with out-of-pocket funds or student loans — and remember, it’s only for one year, so multiply that number by four to see your minimum total cost. Graduating on time will keep you from having to borrow more; only 59% of full-time students in four-year bachelor’s degree programs graduated within six years in 2013.

Additional tools can help you compare net prices among colleges. College Abacus aggregates net price calculators from participating schools and lets you compare the results after answering a series of personalized questions. The U.S. Department of Education’s College Scorecard includes links to schools’ net price calculators and has data on average annual cost, graduation rate and typical monthly student loan payment.

How should I pay for college?

Completing the FAFSA is your first step toward making college more affordable. For the 2018-19 school year, the FAFSA will be available starting in October 2017.

Exhaust grants and scholarships from the federal government, your state and your college before turning to student loans — and even then, max out your federal student loan options before turning to private student loans. There are several benefits to federal student loans, including the ability to borrow without credit history and access to flexible payback options.

More from NerdWallet on paying for college:

Brianna McGurran is a staff writer at NerdWallet, a personal finance website. Email: bmcgurran@nerdwallet.com. Twitter: @briannamcscribe.