Staying in College Longer Than Four Years Costs More Than You Might Think

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The Association for Institutional Research shared the following publication of interest for higher education professionals. The article summary is credited to the Electronic AIR Newsletter (September 2014 edition).

Staying in College Longer Than Four Years Costs More Than You Might Think (Teri Lyn Hinds)

This second in a series of blog posts by the Federal Reserve Bank of New York’s Liberty Street Economics examines the costs of taking longer than four years to graduate with a baccalaureate degree. Taking tuition and fees (not room and board, as those would need to be purchased regardless of enrollment in college) as well as the opportunity cost of forgone earnings, the post projects the net present value lost by an additional year or two in college over the course of a lifetime of expected earnings.

From the article:

All in all, an extra year of staying in school costs more than $85,000, and for those who take two extra years to finish, it costs about $174,000. The net present value of these totals, using a 5 percent discount rate, yields a cost of about $65,000 for each additional year spent in school.

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