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Some Background Research About The Tuition System and Financial Aids

Some background research about U.S. complex tuition system and available aids as well as what makes the high cost of studying in college.

Photo of Jie Dong
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1.      Tuition Rank & Average Pay

In HSBC’s 2014 report on the costs of studying abroad in different locations, the US emerged as the third most expensive option overall, behind Australia and Singapore. HSBC put the average annual cost of study in the US – including tuition fees and living expenses – at US$36,564. (4 courses in undergraduate school * 2 courses in master degree). Especially, it will be US$60,000 in top private school.

2.     Types of Colleges

·          Private school

Independent schools, non-governmental, or non-state schools.

Their facilities and funding are not provided by the federal, state or local government; as opposed to a "public school". They usually have higher tuition fees.

Funding: Funding for private schools is generally provided through student tuition, endowments, scholarship/voucher funds, and donations and grants from religious organizations or private individuals. Private donations can sometimes provide generous financial aid packages for students.

·          Public school

Public colleges are funded by local and state governments and usually offer lower tuition rates than private colleges, especially for students who are residents of the state where a college is located.

·          For-profit colleges

These are businesses that offer a variety of degree programs which typically prepare students for a specific career. They tend to have higher costs, which could mean graduating with more debt.

·          Universities

Universities often are larger and offer more majors and degree options—bachelor's, master's and doctoral degrees—than colleges. Most universities contain several smaller colleges, such as colleges of liberal arts, engineering or health sciences. These colleges can prepare you for a variety of careers or for graduate study.

·          Community college

Community colleges offer two-year associate degrees that prepare you to transfer to a four-year college to earn a bachelor's degree. They also offer other associate degrees and certificates that focus on preparing you for a certain career. Community colleges are often an affordable option with relatively low tuition.

·          Vocational-technical and career colleges

They offer specialized training in a particular industry or career. Possible programs of study include the culinary arts, firefighting, dental hygiene and medical-records technology. These colleges usually offer certificates or associate degrees.

3.     College costs

·          General understanding

the biggest part of college costs is usually tuition. Along with tuition, you’ll probably have to pay some other fees to enroll in and attend a college. Tuition and fees vary from college to college. Other college costs include room and board, books and supplies, transportation, and personal expenses. Just like tuition, these costs vary from college to college. And students can find ways to save money on most of these expenses. Thus, the cost of college depends a lot on the choices you make.

·         Five main categories of costs


Tuition and fees

Pay for taking classes at college. This amount can change based on academic program, the number of credit hours and whether you're an in-state or out-of-state student.

Room and Board

Colleges usually offer a variety of dorm-room options and meal plans to students who live on campus. The charges vary depending on what plan the student choose.

Book and Supplies

The yearly books-and-supplies estimate for the average full-time undergraduate student at a four-year public college is about $1,200. Students may be able to lower these costs by buying used textbooks or renting them.

Personal Expenses

These include laundry, cell phone bills, eating out and anything else students normally spend money on.


These will vary depending on how you travel and how often. It might have student discounts on travel costs.

4.     Tuition system

Public universities: have two tuition fee rates: one for state residents and one for everyone else. The second (more expensive) category applies equally to applicants from other US states and from other countries.

Average fees at US universities, 2014/15

Public two-year colleges

Public four-year colleges (in-state fees)

Public four-year colleges (out-of-state fees)

Private non-profit four-year colleges

Tuition and other fees





Room and board





Total (per year)





Source: College Board

* However, at some prestigious public school, fees is just as high as those in the private sector. For instance, the University of Michigan. Fees for new out-of-state students in 2014/15 at $41,906, plus $10,246 for room and board, and $1,048 for books and study supplies.

4.     Sources of financial aid

  • The federal government (the largest source)

Quick link:

  • State governments
  • Colleges and universities
  • Private organizations, such as companies, clubs and religious organizations
  •     Banks and lending companies  

5. Types of financial aid

There are four main types of financial aid.

  • Grants

Grants are called gift aid because they do not have to be paid back. Grants come from federal and state governments and from colleges. Most grants are need based, which means they are usually given based on your or your family’s financial circumstances.

  • Scholarships

Scholarships are also gift aid. Scholarships come from governments, colleges and private organizations. They may be awarded for academic or athletic ability, interest in a certain subject, or volunteer work, for example. Some scholarships are given based on membership in an ethnic or religious group. Companies may also give scholarships to children of employees.

  • Loans

Borrowing money from a bank, government or lending company is called taking out a loan. A loan must be paid back with an extra charge called interest. The federal government offers low-interest loans to students with financial need. Other lenders charge more interest.

  • Work-Study Programs

The Federal Work-Study Program offers paid part-time jobs to help students pay for part of their college cost.

6. New rules on FAFSA

On Sept. 14, 2015, President Obama announced significant changes to the Free Application for Federal Student Aid (FAFSA®) process that will impact millions of students.
Changes for the 2017–18 FAFSA®
  1. The 2016–17 FAFSA® will be the final FAFSA to launch on January 1. Beginning with the 2017–18 application, the FAFSA will be available to students and families October 1 of the previous year. This means students who need to complete the 2017–18 FAFSA will be able to access and submit the form anytime from Oct. 1, 2016, through June 30, 2018.
  2. In addition to changing the launch date for the application cycle, beginning with the 2017–18 FAFSA, we also will change the requirements for reporting income information. Currently, FAFSA applicants are required to provide income information from the "prior year." For example, 2016–17 applicants must report 2015 income information. Beginning with the 2017–18 FAFSA, applicants will be required to provide "prior-prior" year income information. This means that the 2017–18 FAFSA will collect 2015 income information.
The following table provides a summary of key dates as we transition to using the early FAFSA submission timeframe and earlier tax information.




July 1, 2015–June 30, 2016

January 1, 2015–June 30, 2016


July 1, 2016–June 30, 2017

January 1, 2016–June 30, 2017


July 1, 2017–June 30, 2018

October 1, 2016–June 30, 2018


July 1, 2018–June 30, 2019

October 1, 2017–June 30, 2019




What is a provocation or insight that might inspire others during this challenge?

How to organize the tools and resources and make much sense for students? How to let them know what type of financial aid is available based on their personal and family conditions? How to facilitate more good rules for students who need financial aids?


Join the conversation:

Photo of Amanda Rider

Great summary of the US tuition system Jie! I've often found the different types of colleges and degree offering in the US a bit confusing, but this makes everything a lot easier to understand, thanks!

Photo of Jie Dong

Hi Amanda, thanks for replying me. I encountered the same condition, and that is why I wrote this article. Hope this will be helpful! :)