COLLEGE AND BEYOND

When Is the Cost of College a Deal-Breaker?

When high school students think about the colleges they want to attend, budget is a critical factor.

The listed rates for attending a particular college should not, however, be a deal-breaker before students know what their financial aid offer would be.

• Pro tip: Don’t be deterred by the sticker price; that does not reflect what all students pay.

The cost of college

Location, research focus, student body size, number of professors, and endowment are just a few of the many factors that dictate a school’s total cost.

While the cost varies from school to school, the average annual cost to attend a U.S. four-year postsecondary institution is around $38,000.

Not all students and families pay that amount, however. Students may benefit from financial aid in the form of grants, loans, or work-study programs.

Upward trends

The expected cost of college or career schooling constantly changes—and trends upward. Cost increases can be attributed to a number of factors, from administrative and faculty salaries to amenities and competition.

Despite rising sticker prices, the net price of college—what students actually pay—has declined in recent years.

Sticker prices may have gone up, but student prices overall have gone down.

Cost drivers

Costs can sometimes be increased by the institution. Whether it’s to pay for a new building, more professors, or the expansion of extracurricular programs, a college or career school’s cost rarely stays the same for multiple years in a row.

There are also new expenses that could affect individual students’ yearly costs. Moving into different dorms or off-campus housing may cause costs to fluctuate. So will participation in study-abroad programs, fraternities or sororities, or academic societies.

If a family’s financial situation changes, that could affect eligibility for financial aid, as well.

Financial literacy

Understanding the cost of college is an important step for students building their overall financial literacy.

The positive financial habits students develop as they enter college can serve them throughout their lives. These include:

• Realistic budgeting
• Minimal borrowing
• Targeted credit card use

For a deeper dive and seven more actionable tips, explore this article.

Bottom line: When is the cost of college a deal-breaker?

Cost is a deal-breaker if it’s unsustainable for students and their families after financial aid is applied.

And there is financial aid available. In the 2023–24 school year, college students received more than $250 billion in financial aid.

The first step toward potentially reducing the cost of college is to apply for aid. Get started by exploring (and submitting) the Free Application for Federal Student Aid (FAFSA®) form.

All product names, logos, and brands are property of their respective owners. The Princeton Review is not affiliated with Princeton University.