The cost of college has grown rapidly over the past several decades. The rate at which college costs have grown has greatly outstripped the overall rate of inflation. This means that today’s middle-class students are more likely to have trouble paying for school than their parents or grandparents were in the past. Unfortunately, there has been little sign that the increase in the cost of a college education is slowing down, and outstanding student loan debt seems to hit a new high every year.

The Average Cost of College

If you’re about to go to college, you’ve probably had a bit of sticker shock. A year of education at a top private school can cost more than an ordinary annual salary for a new graduate. Counting only tuition and fees, a year at a private four-year school costs an average of more than $41,000 as of the 2019-2020 school year. Back in 1971, a year at a private four-year school, including room and board, was slightly more than $18,000 when accounting for inflation. That means the cost of an education at a private school has increased by nearly 2.5 times in real terms. If you add in the cost of room and board and other expenses like books and transportation, you could be looking at more than $50,000 for a year at a private school if you pay the full sticker price.

If you’re willing to stay close to mom and dad and and go to a public school in your home state, it’s likely you can save a sizable sum. The average cost for in-state students at public colleges and universities is slightly more than $11,000 per year as of the 2019-2020 school year. Generous financial aid at private schools might narrow the gap, but you’re still likely to save money by going to a publicly supported school in your home state. You’ll have to pay more for a public college or university if you decide to leave your home state for school. The average out-of-state tuition for a four-year public college is more than $27,000. When accounting for financial aid, the cost of a private school might be comparable to an out-of-state public university.

If you have a public two-year community or technical college in your area, you can save a tidy sum of money. The average tuition for in-state students at community colleges is a little less than $7,400 per year as of the Fall 2019 semester. If you choose to opt out of dorm living and live at home while attending a public two- or four-year school, you could likely save even more.

The average cost of a public school can vary widely by region. The most expensive region for in-state tuition is New England. Tuition for four-year schools in New England cost nearly $13,000 per year. If you live in the South, you’ll pay an average of $9,290 a year. Two-year schools are the most expensive in New England while costs are lowest in the West. This is probably related to the fact that states like California provide extensive subsidies for community college education.

Change over Time in College Costs

As noted in the introduction, you’ll need to take the estimated growth in college expenses into consideration before you make your final decision. A study of the cost of college between 1994 and 2015 showed that the average annual cost of college increased by 5.2% over this 21-year period. This might not seem like a big deal, but it means that college costs would double every 14 years given this rate of inflation. During the Great Recession, the United States experienced a short period of deflation as overall consumer prices dropped slightly, but the cost of a college education continued its upward trend.

The overall rate of inflation over the 1994 to 2015 period was only 2.3%. This means that ordinary costs would take around 30 years to double. The rate of inflation on college costs has even exceeded that of health care. When compared to the inflation associated with a college education, health costs increased by a relatively tame 3.7% per year over the 1994 to 2015 period. At the time, it was estimated that a four-year private school would cost more than $56,000 per year by 2025. A four-year public college would have an estimated annual sticker price of about $16,000 by the same date. Unless you have a free ride for an academic or athletic scholarship, there’s no question that it’s likely that college will cost you quite a bit.

College Costs Don’t Stop with Tuition

If you decide to go to college, you’ll likely pay more than just tuition and fees. You’ll have additional costs to pay. These include room and board, books and supplies, transportation and the ambiguous category titled other expenses. These expenses vary much less between public and private four-year schools than tuition and fees do. For example, a year of room and board at a public school will cost a little less than $11,000 while room and board at a private school will cost a little more than $12,000. It’s more, but not nearly the 75% difference that’s evident when comparing tuition between private schools and in-state public schools.

None of the other expense categories are more than $400 apart when comparing public and private schools. For example, books and supplies are expected to cost a little more than $1,200 at both, and you could expect to pay right around $1,100 for transportation whether you choose to go to a private or public institution. Interestingly, transportation and “other expenses” will each cost about $700 more if you decide to go to a two-year school. This is likely because most people who go to community colleges are commuters who will spend more time on the road.

Financing a College Education

Many people can benefit from scholarships. Colleges will frequently offer discounts for those who have academic or athletic promise, but not all scholarships fall into these categories. There are scholarships for specific demographic categories. First-generation college students and people who come from underserved communities can sometimes earn scholarships as well. Working during college can also allow students to offset some of the costs.

The federal government allows parents and other interested friends or family members to cut their taxes while saving for college expenses. It’s possible to save up to $2,000 annually in an educational savings account. These savings are set aside for future college expenses. Depending upon how early your parents decide to start saving, these accounts can earn some nice investment returns and cut the cost of college.

Student loans are also an option. The average student loan debt is nearly $30,000. Depending upon your dependency status, you can borrow between $5,500 and $12,500 from the government per year as an undergraduate student. Your parents can also borrow from the feds through PLUS loans. Some federal student loans are subsidized by the government, and these will usually come with relatively low interest rates. Student who still find they are short on funding can also apply for private student loans. These loans will come with higher borrowing costs.

You won’t have to start paying on your student loans until you’ve been out of school for six months. After that grace period, you’ll need to start making a monthly payment. Even though you don’t have to start paying back your loan immediately, it would benefit you to do so as long as you have an income rolling in. Interest will start accruing to your account the minute you take out the loan, and it will continue to accrue interest charges through the six-month grace period.

Planning for college involves taking the costs of an education into account. Studies have shown that people who have a college degree earn quite a bit more than those who only have a high school diploma. Therefore, a college degree could really wind up paying off for you. If you take out a high level of student debt, your return on investment will be lower. Therefore, you’ll want to start applying for scholarships as soon as possible if you’re a student. On the other hand, if you’re a parent, you’ll want to start saving for your child’s college education to allow the savings to grow over time.