College Costs: 8 Things Every Family Should Consider

Jul 25, 2025 David Lawrence Posted in Articles

While applying to college may be the most stressful part for students, figuring out how to pay for it is often just as overwhelming for parents. With tuition rising at more than double the rate of inflation over the last four decades, the financial burden of higher education can feel like taking on a second mortgage. Fortunately, with the right knowledge and planning, families can make more informed and manageable choices. Here are seven things to consider when thinking about how you’re going to pay for college.


1. In-State Public Universities Still Offer Great Value

Many people know this already, but it’s worth repeating. Public universities can offer exceptional value, especially for in-state residents. For example, in-state tuition for new students at UC Berkeley is approximately $17,500 for the 25-26 academic year, compared to nearly $55,000 for out-of-state students. Private schools like Emory University in Atlanta charge roughly $67,000 for tuition annually, regardless of residency.

2. Start at a Community College

Attending a community college for the first two years can significantly reduce your total college bill. With an average annual tuition of just under $4,000, this route can lower your overall cost by 30% or more, especially if you transfer to an in-state public university afterward.

3. Scholarships Help – But They Don’t Cover Everything

About 64% of students received scholarships from their schools to help pay for the 23-24 academic year, with the average award being around $8,250 – not nearly enough to cover most tuition bills, especially considering the average amount varied significantly depending on school type. And full-ride scholarships are exceedingly rare, with less than 1% of students being awarded enough to cover all costs.

4. Athletic Scholarships: More Myth Than Method

Athletic scholarships are often misunderstood. While millions of high schoolers participate in sports, only a small fraction go on to play in college – and fewer still, less than 2%, receive athletic aid. The average award is modest, and full rides are exceptionally rare outside of major Division I programs. The average award amounts also vary greatly based on sport and gender.

5. Financial Aid May Not Stretch as Far

Most colleges offer some financial aid designed to help families with the cost of attendance. 60% of college students relied on grants to help cover costs for the 2023–24 academic year, with an average award amount of just over $5,300. Aid varies dramatically by school, though: some elite colleges with large endowments can meet full need, while others offer minimal assistance. You can estimate your potential aid using the federal Net Price Calculator at studentaid.gov/aid-estimator.

6. Start a 529 Plan Early

529 Plans are a powerful, tax-advantaged way to save for college. Earnings grow tax-free and can be withdrawn tax-free for qualified education expenses. Starting early maximizes the benefits of compounding. And as of 2024, leftover funds – under certain conditions – can be rolled into a Roth IRA for the beneficiary, giving families even more flexibility.

7. Don’t Raid Your Retirement to Pay for College

Early withdrawals from retirement accounts can be costly. For every $25,000 withdrawn at age 50, assuming a 7% annual return, you could be forfeiting more than $75,000 in retirement income by age 67. Plus, early withdrawals from a retirement account (e.g. IRA or 401K) may be subject to a 10% penalty and income tax. So, while using existing savings seems like a better idea than taking out a student loan, your retirement savings should be your last resort.

8. Planning Ahead Can Make a Big Difference

The college planning process can be overwhelming, but the right guidance can go a long way. Whether you are new parents just starting to plan, grandparents looking to contribute, or you’re currently facing a stack of confusing financial aid letters from newly accepted colleges, it’s never too early – or too late – to get guidance. We can help you estimate appropriate 529 contributions, decode actual costs, and develop a strategy that fits your overall financial goals. There are many ways to stretch your education dollars, and the right plan depends on your unique situation. A short conversation today can help pave the way for a clearer, more confident financial future.


While paying for college is rarely stress-free, families who understand the financial aid system, explore all options, and plan early can make the experience far more manageable. In fact, 54% of families who develop a plan to pay for college prior to enrolling report feeling completely confident with their college financing decisions. A smart combination of savings, cost-conscious school choices, and realistic expectations can help reduce the burden – and increase confidence in the path ahead.