How Much Spending Money Does A College Student Need
When it comes to planning for your childs college expenses, youre probably focused on big-ticket items like tuition, room and board, and textbooks. But its also a good idea to come up with a budget and plan for your childs spending money allowance.
But how much spending money for college does a student need? While the number is dependent on a range of factors, the average amount of spending money for a college student is $2,000 per year or about $200 per month.
When figuring out how much money to set aside and deciding how you and your child should split the cost, here are some guidelines and tips to follow.
Agree on how spending money should be used
If your child qualified for scholarships , those sources of financial aid are designed to cover only qualified education expenses. There are strict guidelines for how that money should be used. Typically, the student can only use their financial aid to pay for tuition and fees, room and board, textbooks, and transportation.
Extra costs, like the occasional trip to the movies or a late-night coffee run, arent covered by financial aid. Thats why your child will need to have a little extra spending money of their own. How much they will need depends on their location, school, and their habits.
Discuss who is responsible for spending money
Average Cost Of Books & Supplies
Some programs require more expensive materials than others, so the cost of books and supplies varies widely.
- At public 4-year institutions, students pay an average of $1,291 annually on books and supplies.
- Books and supplies at private, non-profit institutions average $1,255 at private, for-profit institutions, the average cost is $1,103.
- At public 2-year institutions, students pay an average of $1,538 each year for books and supplies.
- At private, nonprofit institutions, books and supplies average $1,061 at private, for-profit 2-year colleges, the average cost is $1,415.
How Many Credits Do You Need To Graduate College With A Masters Degree
A masters degree can take anywhere from 1 3 years of study. Again, it depends on your course load and the number of credits that youre earning per semester. Some majors will also take longer than others.
Generally speaking, youll need between 30 40 credits to earn a masters degree. This is in addition to the credits that you already earned as an undergraduate, so your total tally could be anywhere from 150 160 credits.
Some subjects can require as many as 60 credits, but they tend to be highly specialized in niche subjects.
Another thing to know about masters degrees is that they dont always follow the three credits per class rule of thumb.
Since theyre teaching advanced, time-consuming subjects, they might be worth more credits per class.
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Recommendations To Help Save For College
Even saving just $100 per month can seem like daunting task. I know it is for me. However, when it comes to saving for college, here are some simple tricks that can help:
1. Save all of your child’s birthday and holiday money. In many families, kids receive money from their grandparents, aunts, uncles, and more. I would estimate that the average kid receives at least $200 per year in gift money. If you saved that, you’re 20% of the way to fulfilling their annual 529 contribution.
A great way to do this is to use a service like Backer. Backer makes 529 plan gifting so easy – so you can both save for your children or help a friend or family member save as well.
2. Look at Upromise. This is a free service that is designed to help families pay for college by simply doing their normal shopping. Upromise offers cash back rewards for linking a credit or debit card and using that card at participating retailers. You can earn anywhere from 1% to 25% back at different retailers. Upromise says that some members are earning at least $1,000 per year – that’s almost everything you need to fully fund a 529 plan. Plus, right now you can get a $25 bonus if you link your 529 plan within 30 days of signing up! UPromise is easy to sign up and save for college – check it out here.
You Likely Will Graduate With Student Loan Debt
Because college costs have increased so much, itâs unlikely that youâll be able to cover the entire cost out of your savings or earnings from a part-time job instead, youâll probably have to use student loans to cover at least some of the expense. According to The Institute for College Access and Success, 62% of 2019 college graduates left school with student loan debt, with an average balance of $28,950.
Depending on your student loan repayment plan, you could be in debt for 10 to 30 years. Thanks to your minimum monthly payments, you may feel pressure to put off other financial goals, like saving for retirement or buying a home.
Two: Investigate Potential Schools
Eachcollege or university’s website should provide cost estimates for the upcomingschool year, so it’s important not to rely entirely on averages as every school differs in how it calculates tuition costs and offers aid. Checking out the websites for specific schools will give you the best idea of what you can expect to pay ascompared to both the national average costs and the costs of other schools onyour list. It could be helpful to print this article and write in your expectedcosts for each category in the spaces provided.
Score Well On Standardized Tests
Many colleges use standardized test scores as part of the admissions process. Some even require minimum test scores as an application requirement. You can usually submit ACT or SAT scores, though there are some schools that prefer one test over another. A good score on either test will not guarantee acceptance to your first choice college, but it will increase your chances of success and can even help to offset bad grades in certain subjects.
If you don’t score well on tests, there are more than 800 test-optional colleges that you can consider. These colleges include technical schools, music schools, art schools and other schools that dont view high ACT and SAT scores as indicators of success for the students that they admit to their institution.
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Choose The Right Goal For You Then Get Started
When it comes to paying for college, the earlier you begin, the better. But getting started can be overwhelming. The price of college is risingthe cost of college has grown faster than the overall basket of goods and services that people generally buy since 1980and theres a host of other unknowns to plan for. Should you choose a public or private university? Should you stay in-state or go out of state? Could your child get scholarships? What about grad school?
Luckily, you dont need to know the answers to all these questions to start saving. Here are a few of the most helpful strategies for deciding how much to save for college.
Where To Open A 529 Plan
What many people don’t realize is that you can invest in almost any state 529 plan. For some people, it can make sense to use your own state’s plan to take advantage of the tax deduction – but not all states offer tax deductions on contributions .
If the state doesn’t matter, the next things to look at are performance and ease of saving. For performance, you want good performance for low fees. For ease of savings, we look at whether the plan can be connected to savings programs like Backer.
Check out this guide here, find your state, and see what plan we recommend: 529 Plan Guide.
SavingForCollege.com ranks the best plans every year. What plan you choose depends on the state you’re in. Check out the map below and find your state:
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Sample College Requirements For Admissions
The table below shows minimum course recommendations for a sampling of different types of selective colleges. Always keep in mind that the “minimum” simply means you won’t be disqualified immediately. The strongest applicants typically exceed the minimum requirements.
|2 yrs||1 year art and another college prep elective required|
In general, it isn’t difficult to meet these requirements if you put in a little effort as you plan your high school courses with your guidance counselor. The bigger challenge is for students applying to highly selective schools that want to see high school coursework that goes well beyond minimum core requirements.
Always keep in mind that your high school record is the most important part of your college application. When selecting classes, you may be handicapping yourself on the college admissions front if you take the easy path.
Major Area Of Study Credits
Major area credits are required for your particular major. Theyre the meat of your degree since they teach you the skills and subjects of your chosen field.
If youre a psychology major, for example, your area-of-study credits might include Addiction, Childhood Development, Human Behavior, and Ethics in Social Sciences. If youre an accounting major, you might need Statistics, Microeconomics, Auditing, and Financial Management.
These credits are usually upper-level ones that you take after you have completed the basic courses. Many college students get their general education credits done first before they move on to intensive area-of-study credits in their chosen subjects.
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Set Your Future College Savings Goal
The bad news is that college costs are expected to double again over the next 10 years. The good news? You dont have to save for the full cost. Shoot for one-third.
Why? The remaining two-thirds can be filled in by scholarships, financial aid and current income . This is a rule of thumb used by financial advisors across the country, and it can also save your sanity by making your savings goal a little more realistic.
Say youre planning for a child whos 4 years old today. Your college savings goal should be $60,400 for a public, in-state college $95,600 for a public, out-of-state college and $118,900 for a private college.
If these numbers seem daunting, dont worry. There are ways to break it down into an achievable monthly contribution. But first, heres a little secret that could cut your monthly contribution in half.
What Is The Cost Of Room And Board
The cost of room and board depends on the campus housing and food plans you choose. Living at home with parents will reduce your costs. For the 2021-2022 academic year, average room and board costs are
- $13,620 at private colleges
- $11,950 at public colleges
Some colleges provide room and board estimates for living off-campus. At public colleges, room and board costs are usually the same for in-state and out-of-state residents.
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Historical Average Cost Of Tuition
The cost of tuition has increased significantly over the last 40 years even after adjusting for inflation.
- In 1963, the annual cost of tuition at a 4-year public college was $243, which is $2,207 when adjusted for inflation.
- Adjusting for inflation, the cost of tuition has increased by $7,142 or 324%.
- Between 2009-10 and 2019-20, before adjusting for inflation, the average tuition increase at 2-year colleges was $698 or 23.9%.
- During the same period, the average tuition increased 39.2% or by $2,632 at public 4-year institutions and 47.2% or $10,500 at private 4-year institutions.
- From 1989 to 2016, college costs increased almost 8 times faster than wages.
- In 1963, the cost of a 4-year-degree was $5,144.
- In 1989, the same degree cost $52,892.
- As of the 2019-20 academic year, $101,584 is the price of a bachelors degree.
Set The Right Monthly Goal
Is it a little too difficult to imagine the end goal, years from now? Consider walking it back to a monthly contribution amount. Just remember that how you save will make a big impact on how much you save by the time your child starts college.
Many experts recommend using a 529 college savings plan, a tax-advantaged investment account. A 529 plan offers tax-free growth and withdrawals for qualified higher education expenses, which include tuition and fees, room and board, books, computers, and special education expenses.
What does this mean for you? Choosing a 529 plan could mean a much lower monthly contribution since the money grows over time. With a 529 plan, a solid monthly contribution amount for a child born in 2022 would be about $140 for a public in-state school, $215 for public out-of-state, or $350 for a private university.
If you intend to save using a traditional savings account or a taxed investment account, youll want to adjust your monthly contribution accordingly. For example, the average interest rate on savings accounts as of January 2022 is just 0.06% APY . At that rate, in a savings account, youd need to contribute about $230 per month for 18 years to pay for a third of the projected cost of a public, in-state college around $350 for out-of-state and around $550 per month for a private university. Much more than the required savings compared to a 529.
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Average Cost Of College By Flagship University
University of Wyoming had the lowest in-state tuition while University of South Dakota had the lowest out-of-state tuition, which lines up with the state rankings. Unlike the state rankings, Pennsylvania State University had the highest in-state tuition at $18,436, with the University of New Hampshire ranking as a close second. And the University of Michigan had the most expensive out-of-state tuition out of all the flagship universities.
What If I Take Out Student Loans
If youve done everything you can to go to college for free and you still have to pay for some of it, you can use student loans to cover the financial gaps.
Whether you take out federal or private student loans, you should borrow only as much as you need. Every dollar that you borrow is a dollar you have to pay back with interest. The more you borrow now, the more youll end up paying back after you leave school. While Biden suggested in his campaign that he would like to forgive $10,000 of student loan debt per borrower, there are no official plans in place so you should plan on paying back your entire balance.
Federal student loans are available when you complete the FAFSA. They include flexible repayment terms, like income-driven repayment plans, forgiveness options and long deferment and forbearance periods. If youre still struggling to pay for college and have maxed out the federal loan limit, you might need private student loans, which can have high interest rates and fewer borrower protections. If this is the case, its important to shop around with a few lenders before applying for your student loan in order to keep your costs as low as possible.
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Tuition Fees In Canada
Universities in Canada set their own fees, and these vary depending on several factors: what program youre studying, whether you are an international or home student, and whether youre studying at undergraduate or postgraduate level. According to the latest report from Statistics Canada, tuition fees in Canada fell by an average of 5.3 percent for undergraduate domestic students and rose by 7.6 percent for international undergraduates in 2019/2020.
If youre a Canadian citizen studying in Canada, you can expect to pay an average of CA$6,463 per year for an undergraduate degree, and CA$7,056 per year for a graduate degree.
Undergraduate tuition fees in Canada
According to Statistics Canada, the average tuition fees for undergraduate international students in 2019/20 are CA$29714 per year. humanities courses tend to be cheaper, while subjects such as engineering and medicine are among the more expensive for dentistry and $14,162 for Medicine . Fees for business and management courses are lower than the national average, at CA$6,827 per year.
Postgraduate tuition fees in Canada
If you want to study at postgraduate level, the tuition fees are generally lower, and again vary depending on your program. Statistics Canada puts the average postgraduate tuition fee for international students at CA$17,744 in 2019/20, which is approximately US$13,437 a four percent increase from the previous year.
Does It Matter Where You Go To College
Many students and parents believe that attending an elite university is a golden ticket to a prosperous future. And that belief isnt entirely unfounded, as statistics continue to show the majority of the countrys highest-paid graduates attended highly selective universities.
However, many who dream of attending an elite school may never do so. Perhaps, despite a stellar academic record and maxed-out extracurricular schedule, their acceptance letter never comes. For the 2017 to 2018 academic year, 281,060 students applied to the nations eight Ivy League schools and, of these, less than 10% received offers.
Two of the most selective schools in the country, Harvard and Stanford, each have acceptance rates of roughly 5%, according to U. S. News. That means only 1 in 20 applicants is extended an admissions offer from these prestigious universities. Many other elite schools have similar acceptance rates.
average return of 618%
So, where does that leave students who will never attend a prestigious university? Are they doomed to make less than their counterparts who graduate from elite schools? Does it really matter where you go to school?
For most students, the answer is encouraging. Research consistently shows that, in the end, it may be the student, and not the school, that makes the most difference.
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