‘Tuition madness:’ The cost of college may be greater than you think

basketball player and hoop

The NCAA Men’s Basketball Championship Tournament is an epic struggle. The drama unfolding on the courts as teams battle for elimination – including come-from-behind wins and surprise victories by underdogs – help make “March Madness” a fitting title for this annual contest to determine who truly, and unquestionably, is THE number one team.

The tournament may also be an apt and timely reminder about the sticker shock parents and grandparents often experience when sending their young scholars off to college. Because the kids may not be able to do it alone. Take a quick peek at the 2018 tuition bracket to see just what type of financial challenge many families may face. Talk about tuition madness.

Unfortunately, college is not likely to become more affordable any time soon, either. Costs are continuing their steady rise, according to the annual Trends in College Pricing report published by the College Board.

Average cost of colleges and universities for full-time undergraduates 2017-2018

  Public four-year in-state Public four-year out-of-state Private nonprofit four-year
Tuition and fees, plus room and board for one academic year $20,770 $36,420 $46,950
Percent increase from 2016-2017 cost 3.1% 3.2% 3.5%

Prices shown are average published charges (enrollment-weighted) for full-time undergraduates, not adjusted for inflation. Source: Ma, Jennifer, Sandy Baum, Matea Pender, and Meredith Welch (2017), Trends in College Pricing 2017, New York: The College Board. © 2017 The College Board.

Furthermore, 63 percent of college graduates now under age 30 took out loans to help finance the degrees they earned according to a Federal Reserve report on the economic well-being of U.S. households published in May 2017. Ninety-four percent of this debt is in the form of student loans averaging $32,731.

Even though it may seem expensive, a college education is an investment that can both enrich lives and boost lifetime earning potential. Two excellent reasons to help make it a reality for the people you care about. The good news is: it is never too early or late to start planning for their educational needs.

For assistance, please contact your RBC Wealth Management financial advisor. Or use the advisor locator tool to find one near you.

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