5 Financial Realities of College Costs

College education is often considered a crucial step towards a successful future. However, with rising tuition fees and living expenses, the financial burden of school has become a major concern for students and their families. We’ll dive into the several factors that contribute to the average cost of college.

1. Crunching the numbers Tuition fees vary widely depending on the type of institution (public or private) and the location. On average, the average cost of public colleges in New Jersey is around $10,119 in tuition compared to private universities $18,681¹. You should also consider rising tuition costs, depending when your child plans to attend college and save accordingly.
   
2. Room and BoardApart from tuition, students also need to factor in the cost of housing and meals. This cost can vary significantly based on whether students live on-campus or off-campus and the region they’re located in. On average, during the 2020-2021 school year, room and board expenses cost around $11,620² to live in campus housing. This might be unavoidable if attending out of state, and an important factor to consider when budgeting for school.
   
3. Level up your savings One of the most important things to consider now is saving up for their degree. While you have a few different options, a high-yield savings account can help maximize returns and pay 10 to 12 times the national average compared to traditional savings accounts. MoneyLion offers a convenient marketplace to compare high-yield savings accounts that could help grow your money for the future. You should also consider a 529 plan, this is an investment account that offers tax benefits when used to pay for qualified education expenses for a designated beneficiary.⁵
   
4. Numbers behind the words Textbooks and supplies are an essential part of college life, and their costs can add up quickly when considering the average costs of college education. While some students opt for used books or rentals to save money, in 2020-2021, the average annual costs on books and supplies can amount to around $1,226³. Sometimes this can easily be overlooked as the prices on books tend to rise year after year.
   
5. The cost of getting around townEvery college is different, some supply transportation while others require driving. Expenses can also vary depending on whether students live on or off-campus and the distance they need to commute. So a few considerations include gas, public transportation fares (if any), or car maintenance expenses. On average, transportation costs tend to be around $1,760 per year⁴. Before you start being asked for gas money, consider putting your savings to work today.
   

Navigating the financial burdens of the average cost of college can be challenging, but understanding some of these costs is the first step towards making informed decisions. Remember, MoneyLion is here to provide tips and ways to save for this next important step in your student’s life and can help better prepare you for their financial journey ahead.

¹https://www.collegetuitioncompare.com/compare/tables/?state=NJ
²https://thescholarshipsystem.com/blog-for-students-families/what-is-room-and-board-what-will-it-cost-you/
³https://www.bestcolleges.com/research/average-cost-of-college-textbooks-statistics/#:~:text=Data%20Summary,per%20class%20on%20course%20materials.
⁴https://www.thinkimpact.com/average-college-student-spending/#:~:text=On%20average%2C%20the%20cost%20for,per%20year%20on%20transportation%20alone.
⁵https://www.savingforcollege.com/intro-to-529s/what-is-a-529-plan