10 Commonly Asked Questions About the Cost of College

At Compelling Wealth Advisors, we know that planning for college is one of the most meaningful—and complex—financial goals families face. We’re answering 10 of the most frequently asked questions about the cost of college and how to prepare for it with confidence.

1. What’s the average cost of college today?

According to the College Board, the average annual cost (tuition, fees, room, and board) is:

• Public in-state: ~$25,000
• Public out-of-state: ~$43,000
• Private: ~$55,000
  These figures vary by institution, location, and financial aid received.

2. What’s included in the “cost of attendance”?

The full cost of attendance typically includes:

• Tuition and fees
• Room and board
• Books and supplies
• Transportation
• Personal expenses
  Some schools may also include health insurance or technology fees.

3. How much will four years of college cost?

Multiply the annual cost by four—but factor in tuition inflation. A four-year degree could range from $100,000 to $250,000+, depending on the school and rate of increase.

4. What’s the difference between sticker price and net price?

• Sticker price is the published cost.
• Net price is what you actually pay after scholarships, grants, and aid.
  Most families pay significantly less than the sticker price.

5. How does financial aid impact college costs?

Financial aid may include:

• Grants and scholarships (do not need to be repaid)
• Work-study programs
• Federal and private loans
  Aid is based on financial need, academic merit, or both.

6. What is a 529 plan and how does it help?

A 529 plan is a tax-advantaged savings account for education expenses. Earnings grow tax-deferred, and withdrawals for qualified education expenses are tax-free. Some states offer tax deductions or credits for contributions.

7. Can 529 plans be used for more than just college?

Yes. 529 funds can be used for:

• K–12 tuition (up to $10,000/year)
• Trade schools and apprenticeships
• Student loan repayment (up to $10,000 lifetime)
• Some international institutions

8. What if my child doesn’t use all the 529 funds?

You can:

• Transfer the 529 to another family member
• Use it for other qualified education expenses
• Withdraw the funds (subject to taxes and penalties on earnings)

Some plans offer flexibility for changing goals.

Thanks to SECURE Act 2.0, starting in 2024, unused 529 funds can be rolled into a Roth IRA for the beneficiary—offering a powerful new way to jumpstart retirement savings [1].

Key rules include:

• The 529 must be open for 15+ years
• Contributions made in the last 5 years are ineligible
• The lifetime rollover limit is $35,000
• The beneficiary must have earned income
• Annual Roth IRA contribution limits still apply

This change gives families more flexibility and reduces the fear of overfunding a 529 plan.

9. When should I start saving for college?

The earlier, the better. Starting when your child is young allows compound growth to work in your favor. Even small, consistent contributions can make a big impact over time.

10. How can I estimate my family’s future college costs?

Use tools like the Ameriprise College Savings Calculator to estimate future costs based on your child’s age, school type, and savings strategy. Your Ameriprise financial advisor can help you build a personalized plan that aligns with your broader financial goals.

Let’s Talk Strategy

Whether you're saving for a child, grandchild, or your own education, we’re here to help you make informed, confident decisions. Let’s explore how a 529 plan—and the new Roth IRA rollover option—can fit into your long-term financial plan.

Schedule a complimentary consultation with one of our Compelling Wealth advisors today.

References

[1] New529 plan rules for retirement plans | Ameriprise Financial