College Cost Data for 2022-2023 School Year

Every year, the College Board releases new college cost data and trends in its annual report. The figures published are average cost figures based on a survey of approximately 4,000 colleges across the country. Over the past 20 years, the average price for tuition, fees, and room and board has increased 46% at public colleges and 30% at private colleges over and above increases in the Consumer Price Index, straining the budget of many families and leading to widespread student debt. Here are cost highlights for the 2022-2023 year.1 This year, public colleges have done a better job than private colleges at keeping tuition and fee increases under 2.3%. Note: “Total cost of attendance” includes direct billed costs for tuition, fees, and room and board, plus indirect costs for books, transportation, and personal expenses. Public colleges: in-state students Public colleges: out-of-state students Private colleges Note: Many private colleges are at or approaching $80,000 per year in total costs. Sticker price vs. net price The College Board’s cost figures are based on published college sticker prices. But many families don’t pay the full sticker price. A net price calculator, available on every college website, can help families see beyond a college’s sticker price. It

November 30, 2022 No Comments

Should you save for a child’s education in your name or theirs?

There are three potential drawbacks to saving money for a child’s education under his or her own name: the kiddie tax, federal financial aid rules, and control issues. First, the kiddie tax. At one time, saving money for college in a child’s name was recommended because of the tax saving opportunities that resulted when children were taxed at their own rate on all their unearned income. However, Congress partially closed this loophole some years ago with passage of special rules commonly referred to as the “kiddie tax” rules. Under the kiddie tax rules, a child’s unearned investment income over a certain amount is taxed at trust and estate income tax rates. In 2018, this amount is $2,100 — the first $1,050 is tax free and the next $1,050 is taxed at the child’s rate. The kiddie tax rules significantly reduce the tax savings potential for holding assets in a child’s name. The kiddie tax rules apply to: (1) those under age 18, (2) those age 18 whose earned income doesn’t exceed one-half of their support, and (3) those ages 19 to 23 who are full-time students and whose earned income doesn’t exceed one-half of their support. To lessen the impact

October 5, 2018 No Comments