Taking an extra year or two to complete a college degree in not out of the ordinary in the US. Actually only 40% of four year college students finish in four years. And 60% finished in six years. According to Nerd Wallet a new study examined how much one or two years extra would cost a student by factoring in :
Real costs: Out-of-pocket tuition plus interest paid on student loans over a 10-year standard repayment period.
Opportunity costs: Lost entry-level income and forgone retirement savings.
Here are the results:
- One extra year could cost students $147,026 at a public college or $155,244 at a private college in combined real and opportunity costs. Two extra years could cost students $282,691 at a public college or $298,995 at a private college in combined real and opportunity costs.
- The average real cost to stay in school one additional year — tuition and interest on loans — would be $18,598 at public colleges and $26,815 at private colleges. Real costs to stay in school two additional years would be $37,456 at public colleges and $53,760 at private colleges.
- Students who complete school in five years would miss out on $82,074 in retirement savings compounded over 45 years, based on directing 7.1% of their income (the average contribution rate for people under 25, according to the Bureau of Labor Statistics) with standard 7% annual returns. Students who graduate in six years would miss out on $150,882 in compounded savings.
- Taking one additional year to earn a bachelor’s degree would result in $46,355 in missed income, while taking two additional years would result in $94,353 in missed income.
There are plenty of reasons a student may choose to delay their graduation date. Some are planned and others are not.