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True Cost of College

Don’t be discouraged by college sticker prices. Most will pay less.

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The true cost of college is often much less than the sticker price. Costs consist primarily of tuition, fees and room and board. The chart below illustrates the average cost that most will pay.

truecostofcollege-(1).jpg Source: College Board, Annual Survey of Colleges, Trends in Student Aid 2020; NCES. IPED Fall Enrollment data.
2-year colleges and 4-year private colleges follow a similar pattern.

Costs are less because of:

  • Scholarships/grants - Gift aid awarded based on a variety of factors, such as: demonstrated financial need, academic achievement, leadership and field of study.
  • Need-based financial aid –EFC (estimated family contribution) is subtracted from COA (cost of attendance) to determine amount of financial aid needed, need-based financial aid is determined based on the remaining amount.
  • Work study - Government funds allowing for part time employment of eligible students.

You can pay for the remainder by:

  • Personal Savings
    • 529 Plan: a tax advantaged plan that is used specifically to save for college expenses.
    • Classic Savings Account: a traditional option that will earn a small amount of interest over time.
  • Student Loans - These are private or federal and require repayment with varying interest rates.

Source: Sallie Mae. How America Pays for College 2019: Sallie Mae’s national study of college students and parents.

1 The Plan is neither FDIC insured nor guaranteed and may lose value.
2 When withdrawals are used for other purposes, the earnings portion of the withdrawal is subject to federal income taxes and any applicable state income tax, as well as an additional 10% federal tax and the recapture of all previous New Mexico tax deductions taken for contributions to an account.