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Understanding the Costs of Studying in the United States

Posted: 13th September 2018 08:52

Studying in the United States can be a fantastic experience. The extensive resources and incredible intellectual capital generated by professors and students alike creates a truly unique learning environment with a multitude of options. However, there is always the question of cost. Horror stories of lifelong savings accounts, juggling two or three part-time jobs, and countless student loans that follow students for decades come to mind when contemplating the enormous price tag attached to studying in the United States. Unfortunately, many of these stories are not, in fact, exaggerations. Parents will frequently open savings accounts for their children at a young age and students will work tirelessly to achieve the required marks to receive certain scholarships or grants prior to beginning university. Yet, it is also important to understand that each student and each university or college is incredibly different—the same story or circumstances will not be the same for two people or two universities. On the contrary, a combination of personal savings, socioeconomic background, performance in high school, test scores, eligibility for loans, private endowments, and the university in question will determine the cost of studying in the United States.

General Tuition & Fees

The university and college system in the United States is highly decentralised, meaning that it varies from state to state and from university to university. The hundreds of public universities are organised by state and will have two different prices—in-state and out-of-state. In-state tuition is cheaper and given to students who are residents of the state whereas out-of-state tuition is the (generally much more expensive) price for residents of other states and for international students. For example, a student from Wisconsin or Great Britain would pay a much higher price to go to school in California than a student who grew up in and currently lives in California. Nevertheless, certain states have agreements or arrangements that allow students of neighbouring states to pay less than most other out-of-state students. To take the example of the Wisconsin resident, if this student wanted to study in the neighbouring state of Minnesota, they would pay perhaps a little more than a student from Minnesota, but the prices would be far more equitable. For the 2016-2017 academic year, the average estimated total cost for one year at a public university for in-state students is $24,610. The average total cost for one year at a public university for out-of-state students is $39,890 for the 2016-2017 academic year.

Likewise, there is a huge difference in the prices of private and public universities. Private universities and colleges do not receive funding from the federal or state government and are sometimes religiously-affiliated, though not always. As a result, private universities and colleges tend to be even more expensive, though there is no difference for in-state and out-of-state tuition when attending a private college. The average estimated total cost for one year at a private university or college in the 2016-2017 academic year was $49,320. However, on top of this general tuition fee—which sometimes includes room and board as well as meals, though not always—there is also the cost of books and supplies which will add on at least a few hundred dollars every year. Similarly, there is no cap or maximum tuition fees for students; quite the opposite, prices continue to rise annually.


This article cites HSBC’s 2016 Report, “The Value of Education: Foundations for the future” as well as the College Board.

How to Pay

These numbers, particularly to students from outside of the United States, are staggering. The first question: how do Americans pay for university? While at times it does seem impossible, there are a variety of methods to pay for university, whether public or private. First and foremost, it is important to understand that very few students actually pay full price, rather a majority receive financial aid in a variety of forms from various sources. Of course, there are a few affluent families who can afford to pay full price, but most families will have opened savings accounts for their children at a young age, even at birth. Unfortunately, even with meticulous calculations and regular deposits into a savings account, this rarely will cover the entire cost of four years at any university. Rather, students look to other options, including student loans and work. Many American students will receive one or two loans (both federal and private). While these loans vary greatly, nearly two thirds of all students incur some debt while attending university, averaging approximately $28,950 per student in 2014. Students will typically spend the next decade of their lives paying off these debts, which can incur substantial interest fees. Similarly, students will receive “work awards,” which are essentially on-campus jobs that students work for 10 to 20 hours a week to earn extra money and offset the cost of tuition. Jobs include working in the cafeteria, doing desk work in dormitories or sports facilities, assisting professors, tutoring, etc. This will usually save students up to $2,000 to $2,500 a year. Some students will find jobs locally at restaurants, bars, and stores to earn extra money, too.

Source (for loans statistics)

Bursaries & Scholarships

Finally, there are many options for scholarships, grants, and other bursaries. Many universities, both public and private, will calculate how much financial aid a student is eligible for based on the student’s parents’ incomes. Those with higher annual salaries will therefore receive less aid than those parents with lower annual salaries. However, how much a university may decide to award a student, in the form of grants and scholarships from public and private foundations, will vary. Typically, private schools, which are usually much more expensive, will give much more financial aid. In addition, students can independently apply for private grants, foundations, and endowments that offer aid. These private sources can award anywhere from a few hundred dollars to hundreds of thousands of dollars. Some applications require students to write for an essay competition, others look for strong test scores in high school, and still others are designed for students with specific interests (for example, there may be a certain award for engineering students and a different scholarship for English students).

Tips & Advice

  1. Don’t let the price tag scare you.This is easier said than done, but when contemplating studying in the United States, remember that the price you see is rarely the price you pay. Do your best not to let numbers intimidate you.
  2. Reach out to the financial aid offices at individual colleges and universities.Don’t hesitate to email or call the financial aid office at any college or university—they will know specific information about the school and will have helpful tips on where to look for aid.
  3. Apply, apply, apply!Apply for as many private scholarships and grants as you can. Sometimes you may only save a few hundred dollars, but something is better than nothing!
  4. Plan ahead.Again, this may seem obvious, but it can be helpful to look ahead and consider, for example, how much you may earn at a summer job to help offset the expenses of studying in the United States.
  5. Check your sources.There are lots of false horror stories, painful exaggerations, and wrong numbers floating around—always check your source to see if it is reliable and always cross reference with other sources.
  6. Remember, it isworth the cost. This is perhaps the most difficult piece of advice to follow. When you receive that envelope in the post with details about the huge costs, it is easy to forget the benefits of studying in the United States—remind yourself that you are in for a fantastic experience that will benefit you for the rest of your life.

Useful Terminology

Here are a list of terms commonly used when discussing tuition and financial aid to help untangle the convoluted system that is American universities:

In-state tuition: Net price for students who are residents of the state where a university is located

Out-of-state tuition: Net price for students who are not residents of the state where a university

is located FAFSA (Free Application for Federal Student Aid): Online forms almost all incoming university

students fill out to calculate which loans and student work awards they are eligible for College Board: American

non-profit organization that coordinates standardized testing for high

school students, collects data on high school and university students, and gives tips and advice for succeeding and paying for university

Financial aid package / Financial aid award: Total amount of financial aid (including public and private scholarships and grants, student work awards, loans) a student receives from a university or college, typically sent with the acceptance letter

Good Websites to Check Out

  1. College Board (
  2. Individual university and college websites (typically ending in .edu)
  3. United States Department of Education (
  4. Individual States’ Departments of Education

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