The Cost of a College Education
There's no question that the cost of college can be intimidating, especially if you have more than one child. In fact, the average tuition and fees for in-state students at public institutions was $11,000 for the 2020-2021 school year, and at private not-for-profit ones it was closer to $40,000. But paying for college may be more manageable than you assume if you plan ahead. You can also investigate a number of ways to control the cost.
While tuition may be the largest single expense of attending college, it isn't the only one. Whether students live on campus or commute from home, they must pay for books, food, transportation, and other expenses - many of which aren't covered by scholarships or loans. While these costs apply no matter where your child attends, you'll find that they vary, just as tuition does, from school to school. You may want to ask your child to weigh those differences in making his or her final decision, along with choices between a rural or urban campus and a large school or a small one.
In 2021, you may qualify for an American Opportunity Tax Credit (AOTC), an enhancement of the Hope tax credit, for money you spend on a child's educational expenses if he or she is enrolled at least half time in a qualified higher education institution and pursuing a degree or other credential. Qualified institutions include liberal arts colleges, universities, and vocational, trade, or technical schools. You may take the credit for your own expenses or those of your spouse, with the same conditions.
If you don't have as much as you need to pay for higher education, schools may offer your child a package of aid:
- Scholarships or grants, which do not have to be repaid.
- Loans, which must be repaid, but usually not until after graduation. Working in certain jobs or locations can reduce the loan or postpone repayment.
- Work/study grants, which pay the student for work done on campus during the school year. Sometimes earnings are deducted from tuition and other times the student earns a salary.