January 26, 2022

Expenses in Thirds

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College is expensive. Don't try to pay for it all at once. Take advantage of all three time periods available: before, during, and after college.

Expenses in Thirds

The average single-year cost for a full-time student on campus in 2021-2022 is $18,830 (public 2-year), $27,330 (public 4-year, in-state), or $55,800 (private 4-year) which includes tuition and fees, room and board, books, and supplies, personal expenses and transportation according to the College Board (Trends in College Pricing, October 2021). 

Rather than trying to tackle the expense all at once, consider breaking it into three buckets: before, during, and after college. You want to save as much as you can before, but know you have options if you don't have enough by graduation.


This period starts at birth and ends at enrollment. As children prepare academically, parents should prepare financially. Think way ahead about what colleges to consider. It's not just an academic decision, but also a financial one. 

Start early and make a monthly contribution. Along with the accumulating interest, this can build up fast. A $100 monthly contribution made for 18 years, earning at a steady rate of 3.0% generates a balance of nearly $28,700 at enrollment. Increase the contribution periodically during those years and the final balance increases as well. See how much you can save as well as the cost of delayed savings, your primary financial institution, or a 529 college savings plan


This period begins at enrollment and continues until graduation. Apply for financial aid: federal, state, and college. It includes a mix of scholarships and grants, loans, and part-time employment. The FAFSA (Free Application for Federal Student Aid) is the cornerstone. Complete it and search the internet for other forms of scholarships. Colleging has a couple of scholarship search options, take a look here. Remember, it's an academic decision and a financial one.  

Plan to trim expenses at home as much as possible. Financial aid awards start with the assumption that parents bear the primary burden for paying for their children's college, and the assessments of the parents' contributions are very strict. Current resources, plus some financial aid, if possible, combine to get this third of the bill paid. Parent loans are available for those who may need to stretch out the assessed parents' contribution. Here's a calculator to estimate your monthly payments.   


This period begins after graduation and can last 10-25 years. Most financial aid awards include some student, and possibly parent loans. They're helpful because they pay the immediate bill. But they require repayment. That's why they're in the after bucket.  

There's nothing wrong with taking on student loan debt. Agree on how much the student and the parents will borrow - neither should take on more than they can handle or absolutely need. Use a calculator to estimate monthly payments. 

Keep careful track of your debt load and understand how it fits with your future earnings path. A $28,000 principal balance, repayable over 10 years with an interest rate of 5.00% requires a monthly payment of just under $297.00. Maybe take on less debt if you'll be a teacher, or more if you'll be an engineer. And many federal loans can be repaid over a longer period or based upon your future income. 

If federal loans aren't enough, consider private loans. But don't take on too much total debt. Check out some creative ways to help pay down your debt after graduation.

You don't eat a big meal in one bite, so don't assume you need to pay for college all at once. Think in terms of several small bites: savings (before), financial aid and income (during), and student loans (after). The more you can save before taking pressure off the second and third periods.