How Much Does College Cost in 2023?

The first step to budgeting for a college education is understanding exactly how much it will cost. The good news is that contrary to popular belief, college tuition costs haven’t actually risen much over the past few years. While it’s true that the average college sticker price has nearly tripled over the last 30 years, it’s remained relatively stable for the past decade. That said, costs at certain schools are still increasing and could rise in the future.

So, how much does college cost in 2023? Here’s what to expect — and how to finance your higher education without paying an arm and a leg.

The average cost of undergraduate school in 2023

The average cost of college in the U.S. is currently about $36,436 per year for a full-time student, according to a recent report from the Education Data Initiative (EDI). Here’s how those costs break down by school type:

The cost of public colleges in 2023

The average annual “cost of attendance,” or COA, at a public, four-year college is $27,940 per year for in-state students, according to College Board data. Tuition and fees account for $10,940 of that. The rest covers books, supplies, and living expenses.

Out-of-state tuition is more expensive. On average, four-year public institutions cost out-of-state students about $28,240 per year in tuition and fees The total COA is $45,240 per academic year.

The cost of private colleges in 2023

Private universities tend to cost significantly more than public ones. The average four-year, private nonprofit college currently charges $39,400 in annual tuition and fees, according to the College Board. Tack on housing costs and other college expenses, and you’re looking at a total of $57,570 for a single school year.

For-profit colleges are sometimes cheaper than non-profit colleges (though they come with their own tradeoffs). EDI reports an average tuition price of $17,825 for four-year, for-profit schools. The total COA for those schools is $32,007 per year.

Are college costs actually going up?

At face value, the average sticker price of in-state, four-year, public universities may look like it’s increasing. But once you adjust for inflation, you’ll see that the true cost has actually declined. According to the College Board, inflation-adjusted prices have fallen by about 1% at public four-year institutions over the last decade.

Private institutions, however, have gotten more expensive. College Board reports that, from 2013 to 2023, the average cost of tuition for undergraduate students at private schools rose by 6% after inflation.

The average cost of graduate school in 2023

Most graduate programs charge tuition per credit hour instead of per semester. As a result, grad students tend to pay a wider range for their degrees — anywhere from $30,000 to $120,000 in total — according to a recent EDI analysis.

Costs vary by program and subject matter as well. According to EDI, the average tuition for an MA at a public school is about $29,000, while private schools charge closer to $62,000.

Like undergraduate degrees, graduate degrees have gotten more expensive over the past 30 years. Between 1990 and 2015, inflation-adjusted prices shot up by as much as 30% per decade. Now, though, graduate and professional school prices seem to be leveling off. According to statistics company Erudera, the price of a master’s degree has not increased significantly during the past few years.

Sticker prices can be deceiving

Most college websites list an official estimate for the cost of attendance. This number, known as the sticker price, often looks shockingly high. The big secret is that students rarely pay the full sticker price. That’s because most college students receive some kind of financial aid — like scholarships, grants, or work-study — which leaves them with a much lower net price.\

For example, Harvard University’s sticker price is about $82,950 per year. But because the school has such a large endowment, about 70% of Harvard students receive financial aid. More than half of all Harvard students receive grants, which can average around $50,000 per student. So, many Harvard students get at least a 60% discount on their education — a phenomenon that’s not reflected in the sticker price.

Why is college so expensive?

The average college tuition has increased over the past few decades for several reasons. These include:

• Marketing costs. These days, hundreds of colleges and universities compete for the enrollment of millions of students. Schools increasingly have to spend big to capture their share of the market. That spending can inflate costs.

• Student perks. Colleges often try to attract students through shiny new facilities, student services, and extracurriculars. While hardly academic, these add-ons contribute to campus culture and college experience — and to rising costs.

• Intentional price inflation. Some colleges may also increase their sticker prices as a marketing tactic. Pricier tuition creates the illusion of a more prestigious school, while increased endowments give students a sense that they’re getting a great deal.

• Reduced education funding. Many states have pruned their education budgets in recent years. Some analysts suspect that colleges have had to make up for those reduced subsidies by charging students more.

• Increased overhead. Over the past few decades, colleges have added more administrative staff — and have started to pay those staffers higher salaries. The higher overhead costs may get passed down to students.

How to make college more affordable

Here’s how to lower a school’s sticker price and find the funding you need to attend.

• Fill out the FAFSA as soon as possible. Supplied by the U.S. Department of Education, the Free Application for Federal Student Aid (FAFSA) is an online form that most colleges and universities use to determine financial need. Filling it out will automatically put you in the running for a number of grants, school-specific funds, and other forms of financial aid. Some schools offer financial aid on a first-come, first-served basis, so aim to fill out your FAFSA as soon as possible.

• Save with a 529 plan. A 529 plan is a type of investment account that offers tax advantages for college savings. You can open one for a loved one or yourself while the beneficiary is in college, high school, or even daycare. When it’s time to pay for school, the beneficiary can withdraw funds — and any accrued interest — tax-free, as long as the money is used for qualified education expenses.

• Choose a more affordable college. One of the best ways to minimize your COA is to attend a less-expensive school. In-state colleges and public schools tend to be more affordable than out-of-state or private colleges. If you want to get further from home, check if your state participates in a regional exchange program. If it does, you may be able to qualify for in-state tuition in neighboring states. And if you’re hoping to enter a very specific field or trade, you may want to consider getting a more affordable, two-year trade certificate instead of a bachelor’s degree, which is another great way to save a ton of money.

• Start at a community college. With smart planning, it’s possible to get a diploma from a top college or university at just a fraction of the total cost. The trick is knocking out your general education requirements — which are usually quite similar from school to school — at a local community college. After a year or two, you can then transfer to a bigger college or university to complete your more specific degree requirements. At the end, you’ll receive the same diploma as everyone else — but with a much lower price tag.

• Lower your cost of living. Room and board cost about $12,000 each year, according to EDI data. So, one of the best ways to reduce your college costs is to chip away at that line item. Pack your own lunches instead of enrolling in a dining-hall meal plan, live off-campus with roommates instead of in on-campus housing, or spend a few semesters crashing at home with your parents. You can also reduce your living expenses by biking instead of driving to campus and sticking to a budget for your personal expenses.

• Apply for scholarships. Unlike student loans, scholarships are funds that you never have to pay back. There are thousands of scholarships available for everyone — from athletes to artists to average students. To find them, use a search platform like Going Merry,1 which can rapidly sort scholarships by eligibility requirements and curate custom lists of awards you already qualify for. With Going Merry, you can even send out batch applications to multiple scholarships at once.

• Borrow federal loans. If you’re open to taking on some student loan debt, federal student loans are a great way to bolster your education funds after you’ve exhausted your savings and scholarship options. There are a few types of federal student loans:

1. Direct Subsidized Loans are awarded according to undergraduate students who demonstrate financial need.

2. Direct Unsubsidized Loans are available to all undergraduates, grad students, and professional students, regardless of need.

3. Direct PLUS Loans are available to all professional and graduate students, as well as to parents of undergraduate students.

Consider a private loan from Earnest

If you’ve already maxed out your allowance for federal loans, private student loans² can help you bridge the last gaps to cover your tuition. Earnest offers flexible, fee-free loans at low interest rates. You can skip payments once per year without paying any penalties, and pay back your loans on your own schedule. Get a free estimate today to see how much you could save.

This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.

¹ Going Merry is an affiliate of Earnest.

² Before applying for private student loans, it’s best to maximize your other sources of financial aid first. It’s recommended to use a 3-step approach to assembling the funds you need: 1) Look for funds you don’t have to pay back, like scholarships, grant and work-study opportunities. 2) Next, fill out a FAFSA(R) form to apply for federal student loans. Federal Direct subsidized and unsubsidized loans, excluding PLUS Loan for Parents and PLUS Loan for Graduate and Professional Students which require a credit check and a credit worthy enforce if the parent or graduate or professional student has adverse credit, do not require a credit check or cosigner, and offer various protections if your struggling with your payments. 3) Finally, consider a private student loan to cover any difference between your total cost of attendance and the amount not covered in steps 1 and 2. For more information, visit the Department of Education website at https://studentaid.ed.gov.