How to compare costs among postsecondary options
About this video
This video shows how to compare the costs of college options: add up tuition, room and board, travel, entertainment and incidentals, then factor in financial aid instead of trusting the sticker price. Sal ranks typical options from community college to state schools to private schools, and reminds students to judge the return on the cost and where they'll thrive, not just the price.
You'll be able to
- list the costs to add up when comparing college options.
- rank community college, state schools and private schools by typical price before aid.
- explain why I should wait for financial aid offers before deciding.
- explain why the cheapest option isn't always the best investment.
Key words
- Sticker cost
- The price a university lists, which isn't necessarily what you'll pay.
- Incidentals
- Smaller extra costs like textbooks and lab fees.
- Community college
- A local, lower-cost college, often a path to transfer into a four-year college.
- In-state tuition
- A special lower tuition that state or city schools give to residents.
- Return
- What you get out of an investment compared to what you put in.
Transcript
- So let's talk a little bit about how to compare costs based on all of your college options. So the biggest piece of cost is going to be your tuition, and then of course your living expenses, room and board, where you're gonna live, and what you're going to eat, and how you're going to eat it.
And then there's a bunch of other expenses. There's gonna be travel, and entertainment. And everyone needs a little bit of entertainment. And especially, if you're going to a college, or one of your options is to go to a college where you might have to travel by air.
Well, that could get a little bit more expensive. And then there's all these other incidentals, things like textbooks, and lab fees, et cetera. And so the first thing I would do is when you get your various options, and it's good to have as many options as possible within reason, is try to add all of that up.
And now, one thing I wanna make sure you keep in mind is the sticker cost. You know, when a university just says our tuition is X, that's not necessarily what you have to pay, and there's many ways for you to pay it. And in many cases, if you come from a family that does not have a high income, you can get significant financial aid.
Now, that financial aid could be in the form of scholarship, it could be just a straight up grant based on your your family's need, or it could be some type of a loan. Now, once you have your options and you know what type of aid you can get for your different options, then you need to just compare them.
And generally speaking, before you consider financial aid, your least expensive options are probably going to be something like going to community college close to home. And even if your goal is a four year degree, in many states, I know out here in California, you can go to a community college for two years, and it's actually kind of a program to transfer then into four year colleges.
So that could be an option. That could be cheaper, you could live at home. The tuition tends to be a lot cheaper at the local community college, and then when you're ready to transfer, you could transfer. The next most expensive option or the next higher price option is usually going to some form of a state school, either a city school or a state school where they they give a special tuition for in-state residents.
If you're strong academically, there might also be schools that give you academic scholarships. And then you have a bunch of private schools that usually have higher tuition than for sure the state schools and the community colleges. And there, the key is to not make your decision until you know whether they're going to give you financial aid, and how, and what kind of financial aid that is.
Obviously, scholarships and grants are a lot better than loans, but then once you have all of that information, you can make your decision. And don't make your decision purely on cost or purely on price. It might be tempting say, "Oh, I'm gonna end up with a four year degree no matter what.
Let me just take the cheapest possible option." That might be a good idea, but ask a lot of questions. It might turn out that maybe one option is a little bit more expensive even after you consider financial aid, but when you talk to recent graduates, they say, "Hey, that was an amazing experience.
It helped me grow so much." And maybe the career services there, or there's just a lot of recruiters that go to that campus that would not go to the other campuses, and so their job prospects are a lot better. And so it's not just the cost. You're making an investment in yourself.
So it's not just the cost. You have to see the return on that cost, you know. So if you were investing in two stocks, it wouldn't be that the dollar stock is better than the $2 stock if the $2 stock is gonna give you a better return. Same thing about colleges.
Now, I won't say the expensive one is also always going to be the best one either. You really have to think what you're gonna be putting in, and then what you think you'll likely get out, and also, where are you going to thrive? Because if you go to a place where you're not happy, where you're not engaged, well, then that's really kind of setting yourself up for a not optimal situation.
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