Paying for College and Understanding College Costs

College costs money — it’s that simple. Paying for it, on the other hand, is not so simple. It isn’t free yet, and never has been, but yes, it used to be much easier to pay for it without using loans. And while there are a few colleges where tuition is free, that isn’t the only expense a college student pays.

Why It Matters

College costs exceed the inflation rate.
According to U.S. Labor Department data, undergraduate and graduate school tuition has risen at triple the rate of inflation this century. Unfortunately, wages haven’t risen at the same rate, even after considering inflation adjustments. A few other factors have contributed to the increased college costs, but the end result is that today’s students end up paying far more for higher education than previous generations without the income boost they expected after earning a degree.
Free tuition isn’t out of the question.
A 2023 article in U.S. News and World Report identified 18 tuition-free colleges. However, certain caveats like demonstrated financial need, campus work, state residency or service requirements may exist. Read the fine print!
Tuition isn’t the only thing students pay.
It’s important to know that tuition isn’t the only cost to attending college. There are fees, housing and meal expenses, books and supplies, transportation to and from school, and personal expenses. Nearly every college or university develops a cost of attendance (COA) that includes these typical expenses, and possibly others. This is often referred to as the sticker price, like a price tag on a retail item. The cost of attendance is used to determine financial need for awarding grants and scholarships, as well as federal financial aid — we’ll have more information about that in a future article.

Understanding College Options

Traditional four-year universities aren’t the only option.
For this article, we’ll focus on three types of Iowa nonprofit schools along with their relative costs: community colleges, private colleges and the three Regent universities, which are Iowa State University, the University of Iowa and the University of Northern Iowa.
There are differences and commonalities among them.
Community colleges offer numerous training programs to learn various trades, as well as the opportunity to earn a two-year associate degree. Private colleges are typically four-year liberal arts schools that offer multiple degree programs. Regent universities are larger than private schools but have individual colleges specializing in certain programs, such as the College of Education or the College of Engineering. Different academic opportunities exist among all three types but with substantial differences in overall costs. Additional consideration must be given to attending a state-run institution outside of one’s home state due to non-resident students being charged a higher tuition rate, as is the case for non-Iowa students attending Iowa’s Regent schools.

Getting the Full Picture

There’s a difference between the Cost of Attendance and Net Costs.
[Note: The total costs of attendance for each of the schools below were obtained from their respective school’s websites in August 2024. Each school determines its costs for the future academic year at different times, and for accuracy purposes, you are being given the most recent available data. Costs differ among all types of schools as well as between schools in each category.]

Total Costs

Total Cost of Attendance (COA) 2024–2025 Academic Year

First Year of College

College A — Community College: $21,287 full year, 2 semesters, living off campus.
[$21,287 x 2 years of attendance = $42,574]
College B — Regent University: $23,372 full year, 2 semesters, living on campus (Iowa resident).
[$23,372x 4 years of attendance = $93,488]
College C — Private Four-Year College: $63,194 full year, 2 semesters, living at home.
[$63,194 x 4 years of attendance = $252,776]

Keep in mind …

These estimates are based on 2024 costs and don’t allow for tuition increases after the first year.
The cost of attendance includes expenses in addition to tuition.
While not able to control tuition costs, your student is able to control some of the additional expenses, like housing and meal costs, personal expenses, and books and supplies.
These estimates don’t consider any potential financial aid your student may receive from the college, federal and state resources or from outside scholarships.

Net Costs

Let’s extract tuition and fees only from the cost of attendance for each of the colleges listed above. Tuition and fees are determined by the colleges and are paid directly to the schools, since your student is a consumer of their educational services.

Tuition and Fees
College A – Community College, $7,320 or $3,660 per semester
College B – Regent University, $9,936 or $4,968 per semester
College C – Private College, $51,830 or $25,915 per semester

Every student planning to attend college is unique, as is their financial situation.
Understanding college costs at the outset will help in planning your student’s pathway, especially since you have three more years to plan effectively. How much a family pays out of pocket for college is directly related to the family income. The lower the family income, the more financial need is demonstrated and therefore, more need-based grants and other financial aid are available. Conversely, the higher the family income, the less financial need is demonstrated, and so the family pays for the majority of college expenses, which may include loans.
The amount of college tuition actually paid (called net tuition) is relative to the family’s income and is based on the amount of financial aid received.
All colleges are required to have a customized net price calculator on their websites. The calculator can help families estimate the amount they might have to spend out-of-pocket toward tuition for their first-year student, or net price. The calculator subtracts estimated financial aid that can be received, therefore providing a net price and not a sticker price.

Next Steps

Be sure to complete the survey questions at the end of this article to be entered into the 529 deposit giveaway!

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