Jun 23, 2016 06:57 AM EDT
Cost Of College Degree Could Shoot Up Drastically With An Extra Year Or Two Victory Laps!
Several students these days are taking an additional year or two in order to complete their bachelor's degree sending the cost of college degree through the roof.
Students who take six years to get a four-year college degree might end up burning a hole in their pocket, having to spend nearly $30,000 in interest on loans, tuition, forgone income and retirement savings, a new study from NerdWallet reveals.
Merely 40% of college students actually receive a bachelor's degree in stipulated four years, whereas the other 60% of students seeking bachelor's degree will be able to get their hands on a diploma, the National Center for Education Statistics noted.
Taking into consideration factors such as real costs and opportunity cost, NerdWallet analyzed the overall cost of an additional year or two "victory laps" (as extra years are sometimes referred to).
Real Cost: Interest paid on student loans for over a standard repayment period of 10 years.
Opportunity Cost: Missing entry-level income as well as forgone retirement savings.
The results are as follows:
- The cost of an additional year can come up to $147,026 for public college students or a whopping $155,244 as far as private college students are concerned - in combined real and opportunity cost. For an extra couple of years, public college students would incur a total cost of $282,691, while it could cost private college students a staggering $298,995 in combined real and opportunity cost.
- In terms of an average real cost to stay an additional year in school including interest on loans and tuition comes up to $18,598 at public colleges and the same amounts to $18,598 at private colleges. Two additional years at public college would cost the students $37,456, and $53,760 at private colleges.
- Taking five years to complete school is not ideal on so many grounds - those completing school in five years end up missing out $82,074 in retirement savings aggregated over a period of 45 years, hinging on directing 7.1% of students' income (as per the Bureau of Labor Statistics, this is the average contribution rate for individuals under 25) along with basic 7% annual returns. Besides, students who take six years to complete school would end up missing out on $150,882 in compounded saving.
- Students who take one extra year to get their bachelor's degree would miss out $46,355 in terms of income. Students who take two additional years to earn a bachelor's degree would miss out an income of $94,353, USA Today reported.
Despite the aforementioned findings, students still have a chance at avoiding more debt that they eventually have to pay off and missing out on saving opportunities and income. Apparently, experts believe there are a slew of things students can do to graduate in four years and stay on track.
Don't take too long to define your career path: Its crucial for college applicants to decide upon a career course as soon as they can - ideally in high school or even before that if possible, according to Lisa Suzuki, director of Counseling@NYU (an online master's degree program for counselling and guidance), who serves at NYU Steinhardt as an associate professor of applied psychology.
Suzuki notes that the students, who finish in four years, tend to have a clearer idea of what they really want to do and think on the far side of the four years.
Having a degree map is important: Students should know what exactly it takes to graduate in four years and should set up a schedule based on those courses. Students who are unsure about their majors, should opt for general education courses and build up their credit, according to Richard D. Sluder who serves at the Middle Tennessee State University in Murfreesboro, Tennessee as a vice provost for student success.
Each semester, try for 15 credit hours: In order to qualify for most financial aid, students have to enroll full time, which imply they need at least 12 credit hours each semester. However, if students take just 12 credit hours, they'll be on the five-year track by default. Students need to take 15 credit hours each semester for the sake of graduating in four years.
Do not delay enrollment in courses: Students, who register late for courses, eventually end up missing out on essential classes they need for a degree. This can actually delay their graduation by at least a semester, if not more, especially considering that quite a few courses are offered not more than once a year.
Track down a transfer-friendly college: Its crucial to know how a school treats transfer credits before planning to transfer. Statistics from The National Center for Education divulge that students who transfer to private non-profit and private for-profit schools end up transferring fewer credits as compared to students who transfer to public universities and colleges.
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