A college degree is already expensive, so most students must count on student loans to pay their way through their education. Unfortunately, it does not look like it will get better, because a college degree could cost $500,000 in 18 years! Read on to discover where this estimate comes from and if the next generation could be faced with this huge amount of student loan debt!
6% Increase in Tuition
Tuition fees for colleges have increased by a steady 6% every year; this was put forward by the investment company Vanguard. If this tuition increase continues over the next 18 years, getting a degree from a private school could cost more than $120,000 a year. Public colleges do not escape this increase either, because a college degree from a public college could cost a student $54,000 a year!
Family Income Vs. Tuition Fees
When we look at the increase in tuition realistically and compare it to the income most families have, then it becomes clear that most families cannot afford the education fees of their children. Therefore, students have no other option than to fund their education with gigantic student loans.
Most families cannot afford the education of their children already, and it is not looking to improve over the next 18 years. The average income for families with children increases by approximately 4.3% each year, compared to the 6% increase annually in tuition fees. In short, the income increase cannot keep up with the tuition increase.
More Burdens on Graduates
Those who graduate now will also be impacted by the increase in tuition fees, since these graduates still have their own student loans to pay off, while saving for their own children’s education and their retirement. Experts recommend that graduates put 10 to 15% of their income away for their retirement, but graduates cannot put these amount asides. Thus, the increase in tuition fees that is expected in the future could also have an impact on pensions and the financial status of graduates today.
Student Loans Are Not Enough
Most students who want to get their college degree notice that their student loan is not enough to put them through college, which could mean that student loans in the future could not only put them more in debt, but might not be enough to put them through college in the first place.
Many students getting their college degree are forced to take on extra loans during their education already. Even though the cost of public colleges is lower than that of private colleges, students from both types of colleges are still faced with additional debt, which is not looking to improve in the future.
If the government won’t step in, parents and students will need to do all they can do to save for their college education.
Conclusion
Considering the tremendous increase in college tuition fees and additional costs that students will encounter during their time at college, Americans who are just starting out to build a family now must prepare for the future education of their children. However, they cannot lose track of their own retirement savings and financial security.
Check out the College Cost Calculator to find your child’s cost
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