Detailed Findings & Methodology
Academia was once an exclusive realm reserved for the wealthiest members of society, and while this is still somewhat the case, it has become far more accessible. The percentage of students from low-income families pursuing college continues to rise, a trend that actually helps understand rising college costs.
“We want more people to go to college, and we already have near saturation [among Americans in the wealthier income levels],” Reeves said. So the question becomes, “as we increase access to lower income people, how do we pay for that?” Institutional grants and other tuition discounts help level the playing field. Because these resources are largely taken from tuition paid by other students, the total cost of college rises as access to higher education expands.
According to the U.S. Department of Education, the average out-of-pocket net cost of going to college was $11,800 at public four-year institutions and $15,000 at for-profit institutions. Work-study programs, loans, and grants helped lower the out-of-pocket net tuition price to $8,500 for students coming from families in the lowest 25% of incomes. For students from families in the highest 25% of incomes, the out-of-pocket net price was approximately $19,700. While out-of-pocket expenses are higher at each income level, it is important to note that accrued interest from loans will increase the long-term cost to students who rely on loans to finance their education.
States have taken steps to lower the cost burden of lower-income students as well as curb rising costs overall. For instance, “some states have by policy lowered costs by shifting students to lower cost options,” Reeves said. He gave the example of Florida, where students who want to attend a four-year public university, must first obtain a 2-year degree, which is often awarded at less expensive community colleges.
To identify the most expensive colleges in each state, 24/7 Wall St. reviewed the net price of attending the 2015-2016 school year in a postsecondary institution from The Integrated Postsecondary Education Data System (IPEDS), a program for the National Center for Education Statistics (NCES). The schools reviewed were only four-year, degree-granting public or private for-profit and non-profit postsecondary institutions. Net price is tuition less any institutional funds such as grants supporting the student, and it represents the best estimate of what is paid by students. Net price data is based on payments by first-time, full-time degree-seeking students and is intended to reflect what traditional students, those who enroll immediately after high school, pay for college in their first year. IPEDS consists of 12 surveys, which collect data directly from institutions that participate in federal aid programs.
Admission rates, number of applicants, tuition and fees were also obtained from IPEDS. Average tuition, professor salaries, and total spending on student aid programs in every state is for the 2014-2015 school year and came from The Chronicle of Higher Education. All other state data came from the State Higher Education Executive Officers association (SHEEO).
Sponsored: Tips for Investing
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.