Saving for College: Looking into the Costs of Various Types of Schools

Buy this book »

No matter where your student decides to attend college, you have to pay the tuition and the books and supplies, and then you have to come up with some solution to the housing question. But because you may need a crystal ball to figure out where your child plans to attend college, the next piece of the puzzle isn't quite as straightforward: estimating the tuition and fees you need to save for. However, when you have an idea of what type of school your student plans to attend, or if your student either is not yet born or just recently populating the planet, or if you have decided on what type of school you hope your student attends, you can begin some significant planning for the future.

To make that planning a little easier — short of resorting to tarot cards — consider some real numbers for each type of school your child may attend.

Exploring career and vocational training schools

Smaller, more specialized schools, such as career and vocational training schools, train students in very specific areas for very specific careers, such as funeral services, dental hygiene, piano tuning, or even bartending. The cost of these programs (which may exist entirely independently of or be attached to community colleges or even four-year colleges) tends to be much smaller than the cost of your typical college.

Taking community college and continuing education classes

Almost every city of any size has at least one community college, an institution of higher education that gives college-level learning without the college-level price. In addition, many large universities have a division of continuing education that provides much the same function as a community college, including the low cost.

Don't assume that because you can't afford an Ivy League college through the normal channels, you also can't afford to take courses in the continuing education division. Tuition at Harvard University in 2007-2008 was $31,456; per-course fees at the Harvard Extension are $800 for most courses.

You can use funds from all your college savings plans to pay either community college or continuing education tuitions, provided that the school you attend is an eligible institution. However, to pay for housing using savings from these plans, you must be at least a half-time student. Be aware of this stipulation, and be vigilant; a mistake here will cost you not only income tax on the distribution, but also a 10-percent penalty.

Going for a four-year public education

Each state has its own public university/college system. Because the universities are larger than the colleges and offer much more programming, they tend to be considerably more expensive than the colleges. If your student has a very clear idea of where she's going in life, it will be most cost effective to find that program at a state college instead of a state university, especially one that's in your state.

Unlike public elementary and secondary schools, public universities and colleges aren't funded totally by tax dollars (in fact, they may actually be funded very little by tax dollars). However, state-run colleges and universities are one of the best bargains around, especially for in-state students. Any state subsidy, no matter how small, is better than no state subsidy for keeping costs down, as reflected in the size of tuition bills.