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College tuition costs
The cost to attend college continues to rise faster than inflation. For the 2006-2007 school year, average tuition and fees at public four-year colleges or universities rose 6.3% to $5,836, according to the College Board report, "Trends in College Pricing 2006".
For private four-year colleges and universities, average tuition costs rose 5.9% over the year earlier, to $22,218. If you add the cost of room and board, the average bill at public institutions rose 5.6% to $12,796. For private institutions, the combined bill rose 5.7% to $30,367. (Note: all data are weighted for enrollment statistics.)
The trend of college costs growing faster than overall prices is also a long-term one. Adjusted for inflation, tuition costs at public colleges have grown 51% over the past 10 years, according to the College Board. (Tuition increases at private schools have outgrown inflation by 32% over the last 10.)
With increasing costs like these, saving for a child's college education is a daunting challenge. However, choosing to not attend college has graver consequences. On average, a person with a college degree earns in excess of $1 million over his or her lifetime than a high school graduate, the College Board estimates.
Several alternatives exist to pay for a college education, whether it is an education for your child, grandchild, or yourself. In addition, the Economic Growth and Tax Relief Reconciliation Act of 2001 expanded college-savings incentives.
The above information is educational and should not be interpreted as financial advice. For advice that is specific to your circumstances, you should consult a financial or tax adviser.
Next, we'll take a look at a new tax benefit that allows you to deduct qualified higher-education expenses.
Next Topic: Deducting college expenses
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