College is being referred to as the 4-year myth.
The notion that 18 and 19 year olds can ascend on their college of choice, select the right major that aligns to their personality and career, and then complete all classes required to obtain their undergraduate degree – in 4 years.
The idea is that these students will get it exactly right and do so in 4 years, and then go to work for the next 40 years directly after.
Well, it’s not exactly happening that way.
In fact it has not been happening that way for decades. When pausing to think about it for a moment, did you know exactly what you wanted professionally when you were graduating high school?
This feeds the dilemma and demonstrates one reason that 4-year graduation rates have become uncommon.
“A recent report by the Education Trust found that just 37 percent of first-year freshman beginning four-year programs completed their degrees within the traditional four years. That’s 37 percent, just 1 in 3 students.”
That means the cost of college for 2 out of 3 students is 50% higher to graduate in 6 years, or $100,000 of additional college costs. With low 4-year graduation rates at most colleges, it should be noted that graduation rates in 6 years are far more common.
In fact, most colleges market and promote their 6-year graduation rate.
This is on purpose.
The schools do not want to advertise their low 4-year rates and prefer to demonstrate a 6-year rate since that is most common and more likely.
It is important to note that graduation rates vary based on type of college – public, private, non-profit, for-profit.
A quick eye-opening summary of these varying rates can be found on the National Center for Educational Statistics web site.
In addition to the notion that college takes longer to complete are two staggering statistics regarding the cost of college and the student debt snowball.
The Cost of College
In a Forbes article written by Mike Patton in November 2015, he qualified that college cost inflation in a twenty-year period from January 1995 to 2015 has experienced a rate of over 5% per year. This 5.2% per year increase is well above the overall US total inflation rate of 2.3% per year and well above the exorbitant healthcare inflation rate of 3.7% per year. The general theory remains that the greater cost of no college degree is the cost of reduced or lost wages suffered by lack of college degree. This theory and thinking has fueled the demand for college degrees for multiple decades now and is a common contributor to this high rate of college inflation. This competitive survival of the fittest thinking provides justification as to why American families have pursued college as diligently as they have since the eighties. A big majority of high school students plan to attend college today, a marked difference from past decades.
Let’s start with some basic cost figures. The cost of a public in-state university is about $20,000 per year for tuition and room & board. Private universities and out-of-state public universities have higher costs of $40-$50,000 per year. Using just the public in-state university 2016 cost estimate of $20,000 per year (not factoring 5.2% college inflation rate) over 6 six years calculates out to a total cost of college of $120,000. Fast forward 20 years to the year 2035 using the past twenty-year college inflation rate and the cost of graduating from a public in-state university will be $330,780 as demonstrated with the calculator.
The Student Debt Snowball
Patton also qualified that student loan debt has reached $1.2 trillion dollars. Over 70% of college graduates have student loans, up from the 40% in the mid-nineties carrying a total college debt load of less than $10 billion dollars. This means the number of students with debt and the amount of debt have both increased multiple fold over the past two decades. This snowball of debt has dramatic impacts on students coming into the job market and ready to take on the world. Being straddled with debt is a burden that may impact life and career decisions for those of the Gen Y and Gen Z generations. This may impact happiness and freedoms that the twenty-somethings of past decades did not have to contend with. Moving back home after college has become a punch line for this generation.
What It Takes To Graduate In 4 Years
Getting through college in 4 years is no easy feat. It requires a lot of right things to happen. Below is a list of the many things that an incoming freshman can do to arrive at their senior year and cross that stage on graduation day in just four years.
- Earn college credits before starting college (IB/AP opportunities in high school)
- Complete all required classes (typically 42-43 classes)
- Take the proper class load (more than minimum of 4 per semester)
- Pass all classes (must pass to earn the credit and in many cases keep financial aid)
- Be smart about class selection (some required courses are harder to get into than others)
- Afford to pay for all classes (running out of money for school is a common impediment)
- Pick a major on time (best have a handle on major by sophomore year)
- Do not switch majors (changing majors after sophomore year is a common impediment)
- Obtain financial aid (this reduces the risk of running out of money to pay for college)
This list may seem daunting. Many of these things commonly trip up the 4-year plan. Parents and students unknowingly financially and mentally plan for just 4 years and end up having to pay for 6 or more.
The High Cost of Not Graduating in 4 Years exceeds $100,000
With the general assumption that it takes six years on average to complete college, then logically two years of additional college increases the need for more student aid and contributes to the ballooning US college debt load.
When checking out the Northwestern University school page at the College Board, it demonstrates a 93% graduation rate within 6 years. This is a high graduation rate for an education that is one of the tops in the country. It also demonstrates a nearly $50,000 per year price tag for tuition and fees, resulting in a total cost of $300,000, an extra $100,000 just factoring tuition and fees for the extra two years.
One exercise worth stepping through is evaluating the many layers of the cost of college. These layers are tuition, fees, opportunity, and financing costs.
Tuition Cost: $10,000-$35,000 per year
Tuition is the cost of attendance for college and is typically a function of per semester for a set number of credit hours for full-time students. Full-time students are typically expected to take a minimum of 12-hours of classes and students are charge full-time tuition costs ranging from $10,000 to $35,000 per year.
Other Fees Cost: $10,000-$15,000 per year
Tuition is only one part of the story. There are many fees such as room & board for students who will be living away from home, whether it be on campus or off campus and close to school. Many college require first-year students to live on campus. Fees for parking, books, labs, material fees, travel semesters and meal plans all add to as much as $10,000-$15,000 per year.
Opportunity Cost: $24,000-$30,000 per year
A decision to be in college is a decision to not be in the work force earning income. The opportunity cost of not working full-time those two years is the amount of salary the students could have earned had they been in the work force punching the clock 40 hours per week. Some college students do maintain jobs while in school, but perhaps not in their career pursuit. For this exercise, let’s assume a college student can earn $12-15/hour for their effort in the work place. This equates to an opportunity cost of $24,000-$30,000 working fifty 40-hour work weeks per year.
Financing (Loan) Cost: $6,000-$15,000 per year
With high costs of college comes the need to borrow to pay for school. Student loans are a major factor in enabling students to attend college. Many loan packages include features that allow deferred interest and payments, but recover those costs later. Many students transfer these loans, consolidate them, and defer them after college – each with a set of terms and typically increased cost impact. For the purposes of this article we will assume that each student gets half of the total college cost of college paid for from merit scholarships, reduced tuition rates, working a part-time job, and a popular fund known as ‘the good old Mom and Dad’ fund. That still would be an annual loan amount of $10,000-$25,000 per year to cover 50% of college costs per year. For a six-year graduation time table that total loan amount is $60,000-$150,000 with interest calculations and fees waiting in the wings. Interest rate calculations on that total loan amount is $6,000-$15,000 with interest and fees. Many people do not consider the true cost of financing. There are many layers to it. In a Wall Street Journal article written by Veronica Dagher on April 5, 2016:
“Remember that generally by the time you pay off your student loans, you will have paid $2 for every dollar you borrowed.” – Susie Bauer, Senior Vice President at Robert W. Baird & Co.
That translates into the highest component of cost for students that have to finance and obtain loans to complete schooling. If the additional 2-years of college requires a total of $20,000-$50,000 of loans, this is a total financing cost of $40,000-$100,000 over the students post-college lifetime.
The Total Costs of College Per Year
Running the math on total costs of college results in a rate of $50,000 – $100,000 per year. T
his high cost demonstrates the importance of graduating college in four years with an ample supply of motivation – at least for those footing the bill.
It is important to note that students may receive various benefits that may actually reduce the cost of college.
A “net price” of college is determined for students who apply for college financial aid. This “net price” is the total cost of college after reducing scholarships, grants, and other aid that does not have to be repaid.
Securing financial aid should be one part of the college formula – and does factor into the total cost of college.
So How To Get Through College in 4 Years?
One word: Planning.
This article is meant as a sobering opportunity for you to take action.
The good news is that there are things you can do.
To provide some peace and comfort, rest assured you can save you potentially hundreds of thousands of dollars by simple planning.
Planning financial aid, planning major and career/field selections, planning to attend the right undergraduate school and planning to comply with the right approach to college.
By proper planning you can increase the probability of graduating college in four years in the best financial shape possible positioned to secure the best job possible.
There are various resources available to support your planning endeavors, whether you start as a high school freshman, high school senior, or are already in college.
It’s not too late to learn and adapt some strategies that can help land this college degree plane.
Resources That Can Assist You
- Books on the topics of college planning, selection, and admissions
- High School and College guidance counselors
- College career centers
- College financial aid offices
- Private college educational consultants and counselors
Private college educational consultants can provide valuable impartial third-party input and assist you on your journey into college. You can conduct an online search for Independent Education Consultants at IECA and at the National Association for College Admissions Counselors at NACAC. The benefit of private educational experts is that they provide one on one guidance and provide an in-between authority that saves many parents the strain on the relationship with their teens, who may range from uninterested to stressed out.
You can also check out other Hired Graduate articles about how to select the right school and how to increase your 4-year graduation success rate.