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College Expenses: How Much Does a College Degree Really Cost?

Home > Students & Debt > College Expenses: How Much Does a College Degree Really Cost?

The term “sticker shock” was born in auto dealership showrooms, but it’s new home is the administrative offices of colleges and universities.

Schools have blurred the true cost of college by advertising prices that scare consumers and then discounting the price dramatically with a financial aid package that makes it feel like too good a deal to pass up.

For example, the advertised cost for attending Harvard in 2017-2018 is $73,600, which would bring sticker shock to most families. The “actual cost” for students who receive financial aid averages out to something closer to $12,000.

The bridge between the “advertised cost” and the “actual cost” is a financial aid package funded from the school’s $35 billion endowment fund. That financial aid package is loaded with scholarships and grants – known as “free money” because you don’t have to pay it back.

In fact, Harvard has a calculator on its website that asks a few questions about your financial health, then estimates how much scholarship money you will receive. If, for example, your combined income for 2016 was $95,000, the school’s online calculator estimates you would pay only $8,325 to attend Harvard.

That’s $65,000 in scholarship and grants!

Grants Bring Down Actual College Costs

Harvard isn’t the only college using financial aid as a recruiting tool. Schools nationwide are offering more grant money to attract students, some of it attached to merit, much of it attached to financial need.

The average undergraduate student has 58% of the cost of college covered by grants in 2017. In 2009, only 48.8% of the cost of college was covered by grants.

The federal government upped its grant awards from $20.6 billion in 2006, to $41.7 billion in 2016. Colleges added another $43 billion in grants in 2016, giving student a pool of nearly $85 billion in “free money” to help lower the true cost of going to college.

So, don’t be discouraged by the numbers you see on a college’s website. No school can match Harvard’s $35 billion endowment fund – the national average endowment was $640 million – but If a college really wants your son or daughter as a student, there are ways to make it happen.

The secret is making sure you get an accurate idea of how much it truly costs to attend your school of choice and how much you can afford.

Average College Costs

There are at least five categories (and numerous sub-categories) of costs that must be added together to determine the true cost of attending college for one school year.

Those costs vary widely from school-to-school, depending on a large set of factors that the student must answer starting with where you expect to attend school and ending with what kind of lifestyle you expect to lead while in school?

A big-city school inherently will cost more than one located in a rural area. Likewise, if you want to live a comfortable college lifestyle (living alone, with a car, off campus, near the entertainment district), you likely will need far more money than if you share accommodations and expenses with multiple roommates, while biking or walking to school.

All of this is tempered by how much you receive in financial aid. As the example regarding Harvard demonstrates, the amount of grant money you receive could reduce the actual cost to an amount you can afford.

If not, you will have to attend a different college or try negotiating between two schools for the best deal or, in the worst-case scenario, look into student loans to fill the void.

In the end, it is best to set up a projected budget and calculate how much you think you’ll need to attend the school you want. Here is a look at five major cost categories and some of the sub-categories associated with them:

Tuition and fees

Tuition is the money paid for instruction while you’re in college. Fees are an add-on cost that helps the college pay for things like workout facilities, campus transportation, intramural or intercollegiate sports; a medical clinic on campus; student government; library books, a student center etc.

There is no standard tuition and fee rate for colleges, but the general rule of thumb is that the more prestigious the school, the more you will pay for tuition and fees.

Here is a look at the 2016-2017 averages for tuition and fees by school category:
  • Public 4-year, in-state school: $9,650.
  • Public 4-year, out-of-state school: $24,930
  • Private nonprofit 4-year school: $33,480
  • Private for-profit school: $16,000
  • Public 2-year school: $3,520
  • Source:

Room and Board Costs

Room and board are the costs for living quarters and feeding yourself while at school.

How much you spend depends on whether you plan to live in a dorm; an apartment; a house or live at home and whether you plan to cook for yourself or sign up for a meal plan.

This is place where actual costs vary dramatically, depending on your school’s locations. An Ivy League school like Columbia University in New York City estimates room and board at $19,792 while another Ivy League school, Princeton University in a small town in New Jersey goes for $15,600.

Large state schools like Ohio State and the University of Texas estimate room and board at $12,292 and $5,035.

The national averages for room and board is:
  • Public 4-year, in-state school: $10,440.
  • Public 4-year, out-of-state school: $10,440
  • Private nonprofit 4-year school: $11,890
  • Public 2-year school: $8,060
  • Source:

» Learn More: Dorms vs. Apartments


Supplies start with books, computers, printers, paper, pens and pencils, but could get expensive, based on the major you pursue.

If, for example, you are majoring in architecture or engineering, you may need computer programs that an English or Education major won’t need. The national average for this category in 2017 was $1,100, but the cost of books is soaring every year so count on it going up from 8%-10% from year-to-year.


This category includes cars, bicycles, scooters and motorcycles and the fees charged to use them on campus. There also are the maintenance and fueling costs for vehicles to consider.

If you use public transportation, add the costs for a monthly pass to your budget.

And don’t forget to add in round-trip airfare expenses, if you plan to attend an out-of-state school.

Experts suggest you budget somewhere around $1,500 for transportation if the student has no car. If they do have a car, at least double that. If air fare is involved in trips home, your transportation budget might be closer to $5,000.

Personal expenses

There is a laundry list of activities that fall into this category, most of them teetering on the fence between needs and wants. You probably do need a cell phone these days, but do you really need cable television? You do need money to do laundry every week, but do you need another new outfit or pair of shoes to wear to the party this weekend?

Personal expenses, as the name suggests, are personal. It’s up to each student to decide whether eating out every night is important or maybe just once or twice a week. That’s certainly a big item on the personal budget. So are game/concert tickets, clothes, shoes, weekend trips, a new television set and maybe even a new bed.

All of those purchases should be based on how much you budgeted for this category and whether you can really afford it.

Colleges find it just as hard as students to guesstimate what is the proper amount to budget for personal items. The University of Chicago, for example, says it costs $65,948 to get through a year there, but only $2,117 – about 3% — is set aside for personal expenses.

Florida State University, on the other hand, budgets $4,764 for “other expenses” in its projected cost of $22,575 to attend school for one year so about 21% of Seminole student’s budget is for personal use.

There is no national average for personal expenses in college, but if you allow more 10%-15% of the budget for “personal use” you probably are overspending this category.

Time Element

One other question that needs to be answered in calculating how much college actually costs is how long do you expect to be in school? More students are stretching out the time it takes to earn a bachelor’s degree, which obviously means stretching out the dollars it takes to pay for that degree.

Most college degrees are set up to complete in four years, but the National Student Clearinghouse said a 2016 study found that it takes 5.1 years for students to earn bachelor’s degrees at state universities. Students in private colleges get their bachelor’s degree slightly faster, finishing in 4.8 years. Student earning an associate degree took an average of 3.3 years to finish what is normally a 2-year program.

Your choice of major could also be a factor in how long you spend in college. Some degrees, such as engineering at many schools, require five years to complete. That’s another year’s expenses for tuition, fees, room, board, etc. to budget for.

Why the Discrepancy?

If colleges and universities cost less than their sticker prices for the majority of students, why don’t they just reduce the sticker price? National Public Radio (NPR) looked for the answer to this question and found several reasons.

The first and most intuitive reason: college is worth whatever you’re willing to pay. While many students can’t afford the full sticker price or don’t want to spend that much on higher education, other students and their families are completely willing and able to pay full price. From an institution’s standpoint, it would be imprudent to accept less when a student would pay more.

Tied to this is the other demographic: students who are unwilling or unable to pay full price. Revenue made from students who pay the full cost can be used to provide scholarships and aid to other qualifying students.

The final reason is less intuitive for most people. NPR reported that prospective students and their families – just like consumers at any retail store – like to feel like they’re getting a good deal. Colleges don’t mind that their advertised prices are high because it shows a higher value and, for most students, a better deal when tuition is marked down.

Whether students pay full price or receive generous scholarships, experts agree that college is almost always worth the investment.

About The Author

Bill Fay

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].


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