The Real Cost of College

It may not be what you think.

Provided by Matt Foos, CPA, Cordell, Neher & Company, Wenatchee, Certified Public Accountant

How much will your family end up paying for college? Your household’s income may have less influence than you think, and some private colleges may be cheaper than you assume.

Private schools sometimes extend the most significant financial aid. Yes – it is true that the more money you earn and the more assets you have in a tax-advantaged college savings plan, the harder it becomes to qualify for financial aid. However, merit-based aid is another matter; for those who qualify, private colleges and universities with large endowment funds support many students with significant financial aid.

These scholarships and institutional grants – awarded irrespective of a family’s financial need – can reduce the “sticker shock” of a college education. A study from the National Association of College and University Business Officers found that grant-based aid effectively cut tuition and fees by an average of 48.6% in the 2015-16 academic year. If your child can fit into the top quarter of a college’s student population in terms of grades or achievement, merit aid may be a possibility. A college that might be your student’s second or third choice might offer him or her more merit aid than the first choice.1

Relatively speaking, some universities demand more from poorer families. An analysis published in 2016 by New America noted 102 U.S. colleges with endowments of greater than $250 million still charged even the poorest students more than $10,000 in tuition for the 2013-14 academic year. Out of more than 1,400 colleges and universities New America studied, hundreds expected households earning $30,000 or less per year to pay the equivalent of half or more of their earnings on higher education.2

 The state legislature of New York made a striking move this spring. It decided to waive tuition for many full-time undergraduate students at both 2-year and 4-year public colleges and universities within its borders. To qualify for this tuition break, households had to earn less than $100,000 annually – and students were required to pledge to work and reside in New York State after they earned their degrees. (The annual earnings threshold is scheduled to rise to $125,000.) Families and their students will still have to pay fees (and if needed, room and board).3

New York is not the only state making such an offer. Programs like the Tennessee Promise and the Oregon Promise have extended tuition-free community college education to their residents. Delaware and Minnesota have adopted similar plans while Rhode Island and Arkansas have plans in process. With higher education in more demand and tuition costs at all-time highs, any tuition assistance helps. According to the Institute for College Access and Success, about 70% of college graduates in 2015 owed an average $30,100 in student loans.4

Even with financial aid and state programs making secondary education more affordable, college is still a significant financial undertaking. There are many ways that you can plan for the cost, and your financial advisor and accountant should be able to help.

Matt Foos is a Certified Public Accountant with Cordell, Neher & Company, PLLC, a Wenatchee public accounting firm. Matt may be reached at 509-663-1661 or


  1. [7/7/16]
  2. [3/16/16]
  3. [4/28/17]
  4. [4/11/17]

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