Student's Guide to Finding the Best Value Online Colleges and Schools
Don't let the sticker price fool you. Colleges - even private, independent ones and online ones - can be more affordable than you think. The guide explores the real costs that go into a college education, and ways students (and parents) can save thousands with the right research and know-how.
Vice President for Enrollment Management
Don St. Clair
Vice President of Enrollment and University Marketing
Debra A. Evans
Senior Associate Director of Student Financial Services
Author of Filing the FAFSA® Vice President, Edvisors Network
Manager of the Office of Financial Aid
If you are starting a college search for the first time, you may be feeling sticker shock. After all, the College Board reports that average tuition and fees can be more than $30,000 at a private, four-year college. Even community colleges and public universities can run thousands each year. Yet that doesn’t mean a college degree is out of reach. A better understanding of post-secondary cost structures, financial aid packages, the scholarship landscape and cost-of-living on and off campus can help students and their families save thousands of dollars over the course of four years. The following guide offers a comprehensive look at what really comes out-of-pocket when paying for college, and how to minimize the outflow of funds both during and after graduation.
Specifically, this guide explores:
- How financial aid and college cost experts think about higher education and money
- What makes an online college affordable, how to choose an affordable online school and calculate costs, and how to make online college even cheaper.
- How tuition costs are calculated and why you’ll probably never pay the published price
- The other college expenses you may be overlooking
- What forms of financial aid are available and how to maximize your award package
- What “net price” really means
- Why return on investment can be just as important as tuition when evaluating college options
Whether you are the parent of a high school student or an adult returning to the classroom, this guidebook is designed to not only answer the questions you have regarding college cost and affordability, but also the ones you didn’t know you should be asking.
Far too many families simply look at just tuition and room and board when calculating the cost of college. Yet higher education experts caution there is so much more that needs to be considered by families when deciding whether a particular college or university meets their budget.Tuition
Tuition is typically the first – and sometimes only – thing families think about when looking at college costs. Rates vary considerably depending on the type of school and its funding sources. Public institutions, for example, receive government funding that help keep their tuition lower. Private institutions, on the other hand, may have to rely on private donors or endowment funds to supplement their tuition rates.
The following chart uses data compiled by the College Board for average published tuition rates for the 2014-2015 school year. Keep in mind that these aren’t necessarily the rates you’ll pay, but we’ll talk more about that when we discuss the difference between sticker price and net price.
|Type of degree program||Average annual tuition and fees|
|Public two-year (in-state tuition)||$3,347|
|Public four-year (in-state tuition)||$9,139|
|For-profit (includes many online schools)||$15,230|
|Public four-year (out-of-state tuition)||$22,958|
After tuition, room and board is the largest expense most college students incur. Like tuition, these rates can vary significantly. The following chart uses data from the College Board to show average room and board costs for students in the 2014-2015 school year:
|Type of degree program||Average annual tuition and fees|
|For-profit (includes many online schools)||NA|
|Public two-year (in-state tuition)||$7,705|
|Public four-year (in-state tuition)||$9,804|
|Public four-year (out-of-state tuition)||$9,804|
Online students, whether attending a for-profit or nonprofit school, are able to maintain their current living conditions while attending school, so there is typically no added expense for room and board for these students. For students living on campus, room and board fees can vary by housing options available at a specific institution. For example, suites or rooms with air conditioning may have a higher price than standard rooms.
While some schools require freshman to live on campus, older students may have the option to live off-campus. When weighing your living arrangements, ask yourself:
- What amenities are included in the price?
- Is a meal plan included with campus room and board?
- Do I have to pay utilities?
- Will I have a roommate?
- If living off campus, how far is the drive to class and how much is parking?
- If living on campus, can I have a vehicle?
Where you decide to live may also depend on where the school is located. Below are some of the common attributes of rural, suburban and urban schools:
|Rural schools||Most campuses are self-contained. Socialization often happens on campus since there may be limited entertainment options off campus.|
|Suburban schools||Campuses may be self-contained, but there may be a larger city nearby offering off-campus work and entertainment opportunities.|
|Urban schools||May be more integrated into the surrounding area. Urban campuses may rely on public transportation, and students may regularly go off-campus.|
Beyond tuition, some schools charge numerous fees: lab fees, student activity fees and technology fees, among others. Some schools require students to have a specific laptop or electronic device.
In addition, students in certain majors might have added expenses. For example, health care students might need to buy medical tools and scrubs. Art students may need specialty supplies. Plus, some careers require internships or licensure that can add extra student costs on top of what the college degree costs.
Lastly, don’t forget textbooks, which can add up to $1,200 a year at a four-year institution, according to the College Board. However, some schools are working to bring down the cost of textbooks. At Peirce College in Philadelphia, for example, many books are stocked in the library for students to borrow instead of buy. Other schools are experimenting with putting textbooks online for easy and inexpensive access.Out-of-Pocket Expenses
Some families may forget that college is not all-inclusive. While paying tuition may get you on campus, there is a laundry list of incidental expenses that must be paid throughout the year.
When making a school budget, families should be sure to plan for the following expenses:
- Cost of traveling to and from school for breaks
- Cost of commuting if living at home
- Insurance, including renters, car and health
- Home furnishings and dorm décor
- Social activities
- Meal plans or groceries
- Sorority or fraternity costs
- Mobile phone
- Personal products
- Summer storage of college furniture
Finally, we come to college costs that families rarely consider, but that are unfortunately all too common. These are the costs associated with failing to complete a course of study or taking more time than expected to complete a degree.
A 2013 study from the National Center for Education Statistics found only 59 percent of freshman enrolling in a bachelor’s degree program at a four-year institution graduate within six years. At community colleges, only 30 percent of incoming students will graduate with a degree within three years.
Even among those who graduate, students may make costly mistakes. They may transfer schools or switch majors, both of which can cost time and money. What’s more, those who take six years to earn a four-year degree are spending thousands of dollars more than intended.
With those statistics in mind, below are strategies that can help increase your chances of success:
- Take AP classes in high school to earn college credit in advance.
- Research a school’s graduation rate. At a four-year institution, are most students graduating in four, five or six years?
- Research what majors are offered at a school so that you can decide early on a major and stick with it.
- Don’t take a year off. While tempting to take a break from school, continuous enrollment helps give you the momentum to complete your degree.
- If you are struggling in a class, see your instructor at the first sign of trouble.
- Look for schools offering a graduation guarantee. Schools such as Vanguard University and University of Nebraska-Lincoln guarantee students selecting a major their first year will graduate within four years. If they don’t, years five and six may be tuition-free.
If a student is more than a year or two away from college, tuition prices could be significantly more than today’s published prices. Use this calculator from Sallie Mae to find out what to expect for future tuition costs.College Affordability and Transparency Center
Maintained by the U.S. Department of Education, this website is a clearinghouse of information regarding college prices. You can find out the average cost for specific degree programs, learn which institutions have the highest and lowest tuition and discover which colleges have runaway tuition rates.My College Planning Team
Although not all the services offered by My College Planning Team are free, the site’s blog provides an abundance of useful information regarding college affordability. Chicago-area residents can also attend free workshops hosted by the firm.
Paying for college can be a challenge. Fortunately, there is plenty of financial aid available for both private and public institutions.
Financial aid is typically broken down into two categories: merit and need-based. Merit aid is based upon a student’s academic achievement. Some states may award grants to students who have achieved a certain score on standardized tests. Likewise, private scholarships may take into consideration an applicant’s grades, community service or other attributes when awarding aid.
On the other hand, need-based aid depends on your family’s finances. To determine the level of need-based aid to award, schools use the following process:
- A cost of attendance is calculated. This cost includes tuition and fees, room and board, books, supplies, transportation, daycare if applicable and a reasonable amount for living expenses.
- Your expected family contribution is calculated. The contribution is determined using a formula created by the federal government. It takes into account your family size as well as its taxable and nontaxable income and any assets.
- The expected family contribution is subtracted from the cost of attendance to determine how much need-based financial aid you are eligible for.
To pay for the expected family contribution, you may use income, savings or investments such as a 529 Plan or a Coverdell Education Savings Account.Types of Aid Available
Financial aid may come from many sources, but it will arrive in one of three forms.
Scholarships and grants: These provide free money that doesn’t need to be repaid. Scholarships are typically merit based and granted by private organizations and foundations. Grants are need-based and most commonly provided by the government. Pell Grants and Educational Opportunity Grants are two popular federal grant programs.
Loans: College loans may fall into one of the following categories: Perkins, Stafford, Plus and private. The first three are federal loan programs while the last option comes from non-governmental sources.
- Perkins: Need-based loans that tend to offer the best interest rate and repayment terms. However, not every school participates in the Perkins program.
- Stafford: These loans may be subsidized or unsubsidized, meaning the government may cover the cost of interest while you are in school.
- Plus: Federal loans available to parents of students.
- Private: Credit-based loans offered by banks and private lenders. Interest rates and repayment terms can vary significantly and may not be as favorable as government programs.
Work study: Federal work study programs provide money to colleges to employ students on campus. Even if they are approved for work study aid, students should know it is not guaranteed. They still need to apply and qualify for a job at their school.Resources:
This is the official government portal regarding financial aid. You can learn about the types of aid available, find eligibility requirements and estimate loan repayments.Upromise
Upromise is a free rewards program that lets users earn shopping rebates that can be used for college expenses. Earnings can be deposited into a 529 Plan or a high yield savings account or may be redeemed by check.Sallie Mae Scholarship Search
Students can use this free scholarship search site run by Sallie Mae, a student loan provider, to sort through more than three million college scholarship programs. Answer some brief questions, and the site will search for the programs for which you’re eligible.Scholarships.com
Students can register for this free website to search approximately 2.7 million scholarship opportunities. Privately run, the website will match users to appropriate scholarships and also provides recruitment services.
With the vast amount of financial aid available, education experts say virtually no one pays the published tuition price, otherwise known as the sticker price. Instead, students have a lower out-of-pocket cost once you factor in discounts and financial aid. This lower price is the net price and reflects the actual cost of their education.
The following chart highlights average net prices for the 2014-2015 school year according to the College Board:
|Type of institution||Net price|
|Public two-year (in-state)||-$1,740|
|Public four-year (in-state)||$3,030|
|Private non-profit four-year||$12,360|
As you can see, community college students tend to receive so much financial aid, their net price ends up being negative. Of course, these are only averages and your actual net price will differ depending on your income and eligibility for merit-based aid. What’s more, these figures are for tuition and do not include the cost of room and board.
Still, the net price figure demonstrates how surprisingly affordable it can be to earn a degree. Even prestigious Ivy League schools that have a reputation for exorbitant tuition rates can have very low net prices.
For example, Princeton University has a published tuition rate of $41,820 for 2014-2015. The school reports nearly 60 percent of students receive need-based financial aid, and the average need-based scholarship or grant award is over $40,000. That makes the net price for these students only $1,820. Room, board, supplies and other necessities aren't included in these calculations.Net Price vs. Net Cost
A 2011 law requires colleges and universities receiving certain federal money to include a net price calculator on their website. Other schools may promote their net price as an incentive to prospective students.
Mark Kantrowitz, author of Filing the FAFSA® and senior vice president of Edvisors Network, says students and families need to be sure they are comparing apples to apples. Some colleges may advertise a net cost which may be different from a net price.
The net cost includes loans which must be repaid and don’t actually reduce the final price tag associated with a degree. According to Kantrowitz, all schools will have a similar net cost, but net prices will vary significantly depending on the generosity of the school.
Families will also want to look at their financial aid award to determine whether scholarships and grants will continue throughout their education. Some schools are very generous with freshmen awards, but that money may not be available to upperclassmen which can increase the net price of college over time.How to Maximize Your Financial Aid Package
To make the most of available financial aid, our experts agree filing the Free Application for Federal Student Aid – known as the FAFSA® – as soon as possible is the best bet. Even if you don’t plan to use federal aid, schools may require the form for their own scholarship and grant programs.
Many schools have a limited amount of money available and filing the FAFSA® earlier helps ensure the pot of money won’t be gone by the time you apply. At the same time, if you are using estimated tax information, try to be as accurate as possible. If your actual income is significantly different than the estimates you used on the FAFSA®, it could negatively affect the aid you receive.
Families should be careful not to take any action, such as cashing in investments, which could artificially inflate their annual income. If you have significant assets in the bank and are carrying debt, you may want to use that money to pay off loans or credit cards since money in the bank can lower a student’s need-based aid.
Also, if you are receiving private scholarships, check with the school to see how that impacts your financial aid award. Some schools may adjust your need-based grant while others will make you keep the grant intact and reduce your student loans instead. Obviously, the school that lets you keep the grant and cuts the loan is the better choice financially.Resources
Run by the Department of Education, this website lets you search by school name and then be taken to that institution’s net price calculator. On the calculator page, enter basic demographic, income and asset information to learn the average net price for students with a profile similar to yours.The College Board’s Net Price Calculator
The College Board has compiled its own list of schools with a net price calculator on their sites. You can search for schools by name or by state and follow a link directly to that particular institution’s calculator. The College Board site also includes additional financial aid information and resources.How American Pays for College 2014
This annual report published by Sallie Mae provides some interesting insight into how families are covering their out-of-pocket costs. You can learn how other families are paying for college and compare how your costs stack up.Free Application for Federal Student Aid
Students can apply for federal student aid on this form. The website lets you start a new FAFSA® or manage your existing application.
When talking about college affordability, it is important to also consider the return on your investment.
The return on investment – or ROI – is what you get in exchange for your degree. Typically, we talk about ROIs in terms of the income you can earn as a result of your education. In other words, will you make enough money to pay off your loans and live the lifestyle you want after graduation?
PayScale.com has calculated the financial ROI for more than 1,000 schools nationwide. They considered the price of the school and then determined graduates earning potential over the course of a 30-year career. According to their calculations, the following schools have the best ROI. The 2014 cost represents the average price of a degree from the institution.
|School||2014 cost||20 year net return on investment|
|Harvey Mudd College||$237,700||$985,300|
|California Institute of Technology||$221,600||$901,400|
|Stevens Institute of Technology||$232,000||$841,000|
|Colorado School of Mines||$112,000||$831,000|
Meanwhile, the following schools came in at the bottom of the PayScale.com analysis. These schools had such low ROIs that you may actually lose money by going there.
|School||2014 cost||20 year net return on investment|
|SUNY - College at Potsdam (out-of-state)||$116,300||-$147,300|
|Maryland Institute College of Art||$207,800||-$138,800|
|Savannah State University||$106,200||-$113,200|
|SUNY - College at Potsdam (in-state)||$80,100||-$111,100|
The low ROI at some of these colleges may not be a reflection of the school’s quality but rather its educational focus. Some majors are associated with much higher ROIs than others, and the schools with the highest ROIs seem to focus on engineering fields.
Salary.com did its own ROI survey and found the following eight majors will give you the biggest bang for your buck:
- Human resources
- Information technology
Even within the same major, ROIs can vary significantly depending on the school. Notably, private non-profit schools seem to dominate the PayScale rankings. Of the ten business schools with the highest ROI, eight are private non-profits. The same is true for engineering majors. However, high ROI schools can be found in every sector: public, private and online.Value That Can’t Be Measured
In addition to the monetary benefits that come with a degree, there may be intangible benefits that can’t be measured by a dollar sign.
Don St. Clair, vice president of enrollment management and university marketing for Woodbury University, notes the benefits of a degree may not become apparent until 10-20 years after graduation. He says students should remember higher education is about making life richer and more meaningful and not simply a conduit to a bigger paycheck.
Glen Thomas, vice president for enrollment management at Pine Manor College, agrees. He says students should remember most people hold multiple jobs in various areas throughout the course of their career. A college education can give students the skills and knowledge needed to smoothly move through these transitions.Resources
This website provides comprehensive information on the ROI offered by nearly 1,500 schools nationwide. You can search by region, major and school type. Pay information is also available for specific occupations.College Affordability Initiatives
This list, compiled by the National Association of Independent Colleges and Universities, lists affordability initiatives at institutions across the country. Ranging from tuition caps to tuition cuts, these initiatives may reduce costs and increase ROI.The College Payoff
The Center on Education and the Workforce at Georgetown University has done extensive research on the value of higher education and how it translates into employment and income. Its report on The College Payoff may be particularly helpful to families researching the ROI for degrees in specific fields.
A few decades ago, an online school education was considered less desirable and not comparable to a traditional college education. Still, in its infancy, online school technology was not quite advanced enough to serve students all over the nation or the globe. There were also concerns about diploma mills or online “schools” that were actually designed as for-profit scams that gave students worthless diplomas in exchange for payment, without students having to do any real academic study.
Online schools have come a long way from that difficult past, and much has changed over the years. Students today can find reputable online schools everywhere, including those that offer fully accredited degrees, from the associate all the way through the coveted doctorates. Additionally, distance learning has evolved to make it easier than ever for students to receive a quality education through online technologies. The scheduling of online learning has evolved as well, allowing students to study at a pace that suits them while still staying on track to earn their degree within a reasonable time frame.
Online schools work much the same way that traditional schools do — they just do it in a different format. The application and admissions process is usually conducted entirely online, just as some traditional schools do today. When students begin taking classes, however, is where the formats differ. Online students study from anywhere they can find a good Internet connection. They can choose between asynchronous or synchronous classes.
Students can log on to the virtual classroom and complete work at a time that is convenient for them. They may still be required to complete elements of the class during a specific time frame.
Students are expected to meet online with their virtual classmates on according to a particular schedule. They may also have the opportunity to work on some aspects of the class independently.
The courses students take online cover the same ground as those taken in a classroom setting. Students can take advantage of top-notch resources, excellent faculty, and great communication options with their peers, so they always feel as though they are in touch, even as though they never set foot in a classroom. Depending upon the program, students might take advantage of message boards, chat rooms, virtual classrooms, video conferencing, lecture streaming and much more. Testing and grading of all courses are just as rigorous as those found at a brick-and-mortar school.
What about the cost of an online school? – Is it as expensive as a traditional college education? It's important to remember that each school is different. While some online schools might cost more than traditional schools, in some cases, online education winds up being the cheaper of the two options. To understand how this works, students must break down the actual costs of their education.
Tuition is usually a set amount for any given semester or class. Though a majority of students see the cost of tuition reduced by financial aid, scholarships and grants, there could still be some amount of tuition that is not covered. Other expenses to consider beyond tuition include extra fees, such as the cost of books, user fees for certain technologies, and travel expenses that might be required if a student is participating in a hybrid program. However, there is the potential to see serious savings by attending college online.
Those who can log on to their classroom remotely don't have the regular travel expenses associated with attending class on campus, nor do they have the added cost of room and board at a place closer to campus.
Because they can work on their own time, students avoid the dreaded situation of having to give up their employment in order to carve out time for education; online learning allows them to continue in their regular job without sacrificing their income.
Other savings might come into play as well, depending on the situation. For instance, parents of small children can study at a time that is best for them. Given that they are not bound by the time constraints of a set classroom schedule, they might be able to save a great deal of money on daycare or a regular babysitters.
In order to figure out what makes a school truly affordable, students should make a list of all the expenses they will expect to incur during their time in the degree program, as well as the money they will save. They should also take into account financial aid, grants, scholarships, and any other monetary assistance that might be coming their way.
When choosing a school that is most affordable, pay close attention to accreditation. In order to receive financial aid from the government, a student must attend a school that has earned accreditation from a government-recognized accreditation board. Though most reputable online schools have accreditation in place, double-check this point to be absolutely certain before applying there, as a school that has not achieved accreditation can require out-of-pocket tuition payments that might make even the most “affordable” school financially unfeasible.
Finally, it pays to shop around for tuition rates. Just as with any other college or university, online schools have different tuition rates. Some schools might cost more per credit hour but have fewer required hours.
A school that requires 60 hours of study to receive a degree and charges $300 per credit hour totals up to $18,000 in tuition.
Another school might require 42 hours and charge $400 per hour, which comes up to $16,800.
Other schools might have a set tuition rate that covers all the credits, which could turn out to be a better deal for students who are able to pack as many courses into one semester as possible, thus saving money in the long run. Study each option carefully when making the decision on which affordable online schools to put on the “short list” of possibilities.
Remember that even the most affordable online schools are still going to cost something for students to attend. For instance, full financial aid might cover tuition, but it could exclude books and technology fees. How can students cut costs even further, making online education as financially feasible as it can possibly be?
Finish what you started.
Complete every class as scheduled. Enrolling in a class but not completing it means not only a great deal of time and effort lost but also incurring the cost of taking the course a second time. What's more, the second try might not be covered by tuition grants or financial aid. The nature of online school means that students must be disciplined self-starters who can carefully plan out the time they need to complete the course; it's vitally important to do this from the beginning to ensure students avoid any problems with a class that simply wasn’t completed by the deadline.
Look at location.
Some online schools offer the same tuition to anyone who might enroll in the program, no matter where they are located. But other online schools might have lower tuition rates for students those who actually live in the state where the school is based. This is especially true of online programs conducted through public universities and colleges.
Get creative with textbooks and other learning materials.
Though most online courses offer all textbooks and other materials through virtual means, some might require students to purchase textbooks or other materials in order to complete their work. If textbooks are required, students can look into renting them, which could help save money in the long run.
Other ways to make online college affordable include:
- Taking advantage of tax credits for students, such as the American Opportunity Credit and the Lifetime Learning Credit
- Seeking out scholarships and grants in addition to typical financial aid program offerings every year while in college, not just your freshman year
- Taking advanced placement courses examinations in high school
With careful planning and being mindful of cost-saving measures, students attending online schools can earn their degree without breaking the bank.
Students who are looking for a few hard numbers in college pricing trends can look no further than the graphics below. We have pulled some of the most pertinent data from College Board’s Trends in College Pricing 2014 report to give students a comprehensive look at tuition costs at traditional colleges.
Please note: Given that our focus is online degrees, the following numbers do not include room and board costs.
Average price for tuition (before financial aid)
- Public four-year in-state tuition: $9,139 in 2014-2015, $8,885 in 2013-2014.
- Public four-year out-of-state tuition: $22,958 in 2014-2015, $22,223 in 2013-2014.
- Private non-profit four-year tuition: $31,231 in 2014-2015, $30,131 in 2013-2014.
Average price for tuition (before financial aid)
- Public four-year in-state tuition: $3,030 in 2014-2015, $2,950 in 2013-2014
- Private four-year tuition: $12,360 in 2014-2015, $11,860 in 2013-2014
There is no denying a college degree can be a major expense, but it may also be the most valuable thing you ever possess. The right degree in the right field may result in a high-paying job that could mean millions over the course of your lifetime.
However, that doesn’t mean you should go deep into debt for a degree. Instead, sit down with your family to develop a realistic budget of what you can afford. Don’t forget to include expenses beyond simply tuition and room and board.
As you apply to schools, don’t rule out any institutions immediately because of their published rates. Remember, most students pay a net price that is far below the sticker cost. You may be surprised at how affordable a prestigious, private school can be.
Once you begin to receive acceptance letters and financial award notifications, create a spreadsheet to record the net tuition price, room and board and other expected expenses. Also, note any special initiatives that can reduce tuition.
For example, Adelphi University offers a flat tuition rate for students who take 14-17 credits each semester. By taking more credits per semester, students can reduce their overall cost of tuition. Another example is Western Governors University which allows students to move quickly through classes in the subject matter they already know.
Compare the totals on your spreadsheet to the budgeted amount you can realistically spend. Finally, use ROI information to make a final decision on which school in your budget offers the best value.
On campus, be sure to follow through and keep up on your studies to ensure you graduate on time and with your desired degree.
With a little planning and some research, college doesn’t have to be an outrageous expense. It can be surprisingly affordable and an investment that will pay you back generously throughout your lifetime.
529 plan: A tax-sheltered investment account for education savings.
Expected family contribution: Amount a family is expected to pay toward a student’s higher education costs. The contribution is determined using a formula created by the federal government.
Free Application for Federal Student Aid (FAFSA®): The application form for federal student aid. Some institutions may also use this form when determining eligibility for their own aid programs.
In-state tuition: Tuition rates charged by public institutions to residents of their state. Individuals typically must live in a state a certain amount of time before they are considered residents.
Merit based aid: Financial aid that is dependent upon student achievement or talent. Merit based aid generally comes in the form of scholarships.
Need-based aid: Financial aid based upon income and assets. Federal need-based aid may be offered as a grant, loan or work study.
Net price: The sticker price minus as scholarships or grants awarded to a student.
Out-of-state tuition: Tuition rates charged by public institutions to students who are residents of other states.
Return on investment (ROI): The payoff for earning a degree, typically calculated as the expected lifetime earnings for someone with a particular degree.
Sticker price: An institution’s published tuition rate.