Study: Here’s How Much College Credits Actually Cost

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It’s not always easy to project college costs for incoming students. Even at the smallest unit, a college credit, costs can vary.

That’s why, in a new study, we used Department of Education tuition data to take a closer look at what the average cost per credit hour really is these days for incoming freshmen. Spoiler alert: it’s probably more than you think.

The study also underlines how widely students’ costs can vary — and how much their college choices can impact those costs. Especially since each credit earned is a step toward a 120-credit-hour undergraduate degree, and each step must be paid for.

Here are the bare minimum college costs America’s college students are facing today.

The average cost per credit hour is $594

cost per credit hour by college sector

After calculating the average cost per credit hour for colleges across every sector (including private and public, for-profit and not-for-profit, and two- and four-year colleges), the typical cost of a college credit comes out to $594.46.

That’s a significant charge that adds up to about $14,267 a school year. Or, $71,335 for the 120 credits typically required for a four-year degree.

But just because that’s the average across all institutions for which tuition information is available doesn’t mean it’s what a typical student pays. Additionally, the type of college a student chooses has a significant impact on how much they pay per credit.

Public two-year colleges are the cheapest at $135 a college credit

cost per credit hour at public colleges

Here are the average costs of a college credit for public colleges:

  • Four-year, public: $324.70
  • Two-year, public: $135.09
  • Less than two years, public: $281.17

Two-year public schools, such as community colleges or local technical or vocational schools, have the lowest average cost-per-credit of any college sector.

On average, a two-year public school will cost about 60 percent less per credit hour than a four-year public school. And at just $135 a college credit, local community colleges are one of the most accessible and affordable ways to earn college credits.

With the minimum 120 credit hours required for a bachelor’s degree, a student attending a two-year school for their first 60 credits then transferring to a public school would save $11,377 on their college education on average.

Of course, the savings provided by attending two-year public schools will vary by state.

New Jersey, for example, has the biggest dollar-cost difference between two- and four-year public schools, at $169 and $519 per credit, respectively.

Therefore, a student earning his first 60 credits at a New Jersey community college before transferring to a four-year in-state school would save $20,990 on tuition costs.

View our full state-by-state analysis of how much students can save by attending community college.

Four-year private colleges have the highest costs per college credit at $1,039

cost per credit hour at private colleges

When it comes to private schools, students are paying the highest cost per credit hour. Here’s why:

  • Four-year, private not-for-profit: $1,038.69
  • Two-year, private not-for-profit: $556.51
  • Less than two years, private not-for-profit: $536.72

A college credit at a private, four-year college costs over three times what a college credit costs at a four-year public college.

What’s more, when comparing two-year private and public colleges, private schools cost more than four times as much per credit. Therefore, when it comes to higher education, a private college experience comes with a higher premium.

However, students hoping to attend a private college can try the method of attending a lower-cost college first and then transferring. By earning their first 60 credits at a community college before switching to a four-year private college, a college student could save a whopping $54,659 on average.

Plus, by attending a community college first you’ll likely need to take out less federal student loans or private student loans to pay for your education.

In many states, the savings are even higher.

For example, in Rhode Island, the state with the biggest difference between private school and public school tuition costs, a four-year degree would average $132,200 more when earned from a private school.

And even in North Dakota, the state with the smallest cost gap between public and private, the savings are still high at $30,300.

For-profit schools cost more but offer less value

cost per credit hour at for-profit colleges

Then there are the for-profit schools. Here’s the breakdown regarding costs per college credit for these institutions:

  • Four-year, private for-profit: $647.47
  • Two-year, private for-profit: $601.05
  • Less than two years, private for-profit: $523.22

The cost-per-credit at a four-year, for-profit college is cheaper than at private colleges. But it’s double what a college credit costs at a four-year public school.

Additionally, among two-year schools, the cost per credit at a for-profit college is about 4.5 times higher on average than at a community college or other public school.

And while for-profit schools cost twice as much or more to attend than their public counterparts, they tend to offer less value to students. In fact, instead of boosting earnings, most students of for-profit schools actually earn less after their degree than they did before.

“On average associate’s and bachelor’s degree students experience a decline in earnings after attendance, relative to their own earnings in years prior to attendance,” the National Bureau of Economic Research reported in a 2016 working paper.

When it comes to college ROI, the high costs of for-profit schools combined with poor outcomes on post-study earnings can make these types of institutions a poor investment for students.

Student loans add 20 percent or more to college credit costs

The figures outlined so far are the upfront costs of earning a college credit at different institutions of higher education.

But how much does a credit cost if a student loan is used to pay for it?

Currently, the Department of Education has interest on federal Direct Loans at 3.76% APR. That is an effective rate of about 20 percent over 10 years.

Therefore, with an average credit cost of $594, that’s an extra $120 in interest. And for 120 credit hours, that’s an extra $14,400 in interest alone.

Here’s how student loan interest costs break down by school credit type:

  • A two-year public school credit at $135.09 would cost $162 over 10 years ($27 in interest)
  • A four-year public school credit at $324.70 would cost $390 over 10 years ($65 in interest)
  • A four-year private college credit at $1,038.69 would cost $1,248 over 10 years ($209 in interest)

Simply using a student loan to cover college costs effectively increases per-credit costs anywhere from $27 to $209. And for a full 120-credit undergraduate degree, additional interest costs can range from $3,240 up to $25,080.

This highlights the importance of avoiding and minimizing student loan debt. It’s truly the key to keeping the true costs of college low. Not to mention keeping monthly costs affordable once student debts enter repayment.

Which college you choose truly matters money-wise

Overall, this study underscores the fact that going to college in America is a costly affair.

But it also reveals the wide gap in costs between different kinds of colleges. What’s more, it proves there are choices college students can make that can significantly decrease the costs of their studies and degrees.

Overall, choosing public colleges, avoiding for-profit colleges, and earning credits at a community college before transferring, are smart, effective cost-cutting strategies.

Methodology: College credit costs were calculated using tuition data from the U.S. Department of Education. The cost was based on annual tuition and fees for the college, assuming two semesters of full-time enrollment (12 credits). Public school averages are based on the cost-per-credit for all two-year and four-year public colleges for in-state residents. Private school averages are based on all tuition prices at private not-for-profit and private for-profit colleges in each state. Data is for 2014-15 school year, released May 2016.

Need a student loan?

Here are our top student loan lenders of 2021!
LenderVariable APREligibility 
1.04% – 11.98%1Undergraduate, Graduate, and Parents

Visit College Ave

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Visit SallieMae

3.84% – 9.40%3Undergraduate and Graduate

Visit CommonBond

1.05% – 11.44%4Undergraduate and Graduate

Visit Earnest

1.22% – 11.66%5Undergraduate and Graduate

Visit SoFi

2.76% – 7.14%6Undergraduate and Graduate

VISIT CITIZENS

1.24% – 11.99%7Undergraduate and Graduate

Visit Discover

* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.

1 Important Disclosures for College Ave.

CollegeAve Disclosures

College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
 
This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. This informational repayment example uses typical loan terms for a first year graduate student borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.10% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $141.66 while in the repayment period, for a total amount of payments of $16,699.21. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

Information advertised valid as of 4/22/2021. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.


2 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.

3 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.  If you choose to complete an application, we will conduct a hard credit pull, which may affect your credit score. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Jan 1, 2021 and may increase after consummation.


4 Important Disclosures for Earnest.

Earnest Disclosures

  1. Rates include 0.25% Auto Pay Discount
     
  2. Explanation of Rates “With Autopay” (APD)
    Rates shown include 0.25% APR discount when client agrees to make monthly principal and interest payments by automatic electronic payment. Use of autopay is not required to receive an Earnest loan.

    Available Terms
    For Cosigned loans – 5, 7, 10, 12, 15 years. 
    Primary Only – 10, 12, 15 years

    In school deferred payment is not available in AL, AZ, CA, FL, MA, MD, MI, ND, NY, PA, and WA).


5 Important Disclosures for SoFi.

sofiDisclosures

UNDERGRADUATE LOANS: Fixed rates from 4.23% to 11.26% annual percentage rate (“APR”) (with autopay), variable rates from 1.22% to 11.66% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.13% to 11.37% APR (with autopay), variable rates from 1.12% to 11.73% APR (with autopay). MBA AND LAW SCHOOL LOANS: Fixed rates from 4.30% to 11.52% APR (with autopay), variable rates from 1.29% to 11.89% APR (with autopay). PARENT LOANS: Fixed rates from 4.60% to 10.76% APR (with autopay), variable rates from 1.22% to 11.16% APR (with autopay). For variable rate loans, the variable interest rate is derived from the one-month LIBOR rate plus a margin and your APR may increase after origination if the LIBOR increases. Changes in the one-month LIBOR rate may cause your monthly payment to increase or decrease. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 4/1/2021. Enrolling in autopay is not required to receive a loan from SoFi. SoFi Lending Corp., licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. NMLS #1121636 (www.nmlsconsumeraccess.org)..


6 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

Undergraduate Rate Disclosure: Variable interest rates range from 2.76% – 7.14% (2.76% – 7.14% APR). Fixed interest rates range from 3.01% – 7.50% (3.01% – 7.50% APR).

Graduate Rate Disclosure: Variable interest rates range from 2.19% – 6.73% (2.19% – 6.73% APR). Fixed interest rates range from 2.89% – 7.09% (2.89%-7.09% APR).

Business/Law Rate Disclosure: Variable interest rates range from 1.36% – 9.54% (1.36% – 8.82% APR). Fixed interest rates range from 4.13% – 9.84% (4.13% – 9.12% APR).

Medical/Dental Rate Disclosure: Variable interest rates range from 1.36% – 8.34% (1.36% – 8.04% APR). Fixed interest rates range from 4.03% – 8.64% (4.03% – 8.34% APR).

Parent Loan Rate Disclosure: Variable interest rates range from 2.10% – 7.41% (2.10%-7.41% APR). Fixed interest rates range from 4.69% – 7.83% (4.69% – 7.83% APR).

Bar Study Rate Disclosure: Variable interest rates range from 4.45% – 9.60% (4.45% – 9.53% APR). Fixed interest rates range from 7.39% – 12.94% (7.38% – 12.81% APR).

Medical Residency Rate Disclosure: Variable interest rates range from 3.55% – 7.05% (3.55% – 6.77% APR). Fixed interest rates range from 6.99% – 10.49% (6.97% – 10.07% APR).

Variable Rate Disclosure: Variable Rates are based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of March 1, 2021, the one-month LIBOR rate is 0.11%. Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%. 

Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.

Lowest Rate Disclosure: Lowest rates require a 5-year repayment term, immediate repayment, a graduate degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.

Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer.  Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.

Eligibility Criteria: Applicants must be a U.S. citizen, permanent resident, or eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For applicants who have not attained the age of majority in their state of residence, a co-signer is required. Citizens Bank reserves the right to modify eligibility criteria at any time. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/Promissory Note, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens Bank participating school.

Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.

Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.


7 Important Disclosures for Discover.

Discover Disclosures

  1. Aggregate loan limits apply.
  2. Get a cash reward on each new Discover undergraduate and graduate student loan when you earn at least a 3.0 GPA (or equivalent) in any academic period covered by the loan. Limitations Apply. Visit DiscoverStudentLoans.com/Reward for terms and conditions.
  3. Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments. The interest rate ranges represent the lowest and highest interest rates offered on Discover student loans, including undergraduate, graduate, health professions, law and MBA Loans. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. For variable interest rate loans, the 3-Month LIBOR is 0.250% as of April 1, 2021. Discover Student Loans may adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Your APR will be determined after you apply. Learn more about Discover Student Loans interest rates at DiscoverStudentLoans.com/Rates.
  4. Lowest APRs shown for Discover Private Consolidation Loans are available for the most creditworthy applicants who are approved and choose a shorter repayment term, and include a 0.25% interest rate reduction while enrolled in automatic payments. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. For variable interest rate loans, the 3-Month LIBOR is 0.250% as of April 1, 2021. Discover Student Loans may adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Your APR will be determined after you apply. Visit Discover.com/student-loans/consolidation.html for more information, including up-to-date interest rates and APRs.
Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.