There's a reason that the student debt crisis has gotten out of hand: With the cost of college continuing to climb, many students have no choice but to load up on loans to afford a degree. And while the annual price tag for a college education can vary tremendously from one university to another, if you're gearing up to apply in the near future, you should have a good idea of the expenses you're likely to take on. 

A male college student studying alone in a library.

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Here's what the average yearly cost of college looks like today, based on data for the 2019-2020 academic year as provided by The College Board:

Type of College

Average Annual Cost of Tuition and Fees

Average Annual Cost of Room and Board

Total Average Annual Cost





Four-year, in-state public




Four-year, out-of-state public




Four-year private




Data Source: The College Board.

As you can see, there’s a sizable gap between the average yearly cost of public education versus private. That said, private colleges are often in a position to give out more grant money than public ones, so it pays to apply to your top schools and see what financial aid packages they come up with. At the same time, you should understand your borrowing options ahead of time so that you’re not compelled to make a bad decision once those college acceptance letters start rolling in. 

Federal loans versus private loans

When it comes to taking out student loans, you have two categories to choose from: federal loans and private loans

Federal loans are distributed by the U.S. Department of Education. To qualify, you must fill out the Free Application for Federal Student Aid, or FAFSA. From there, you’ll be awarded a certain amount of federal aid on a yearly basis, and you can apply every year you’re in school. 

If you’re given the option to take out federal loans for college, you’ll benefit from relatively low interest rates that also remain fixed throughout the life of your repayment period. That’s important, because it means your monthly payments can’t change unless you refinance your loans or take steps to change them.

Speaking of which, with federal loans, you can change your repayment terms if you graduate and find that you can’t keep up with your standard monthly loan payments. This is because federal student loans offer income-driven repayment plans, which calculate your monthly payments as a reasonable percentage of your income. Federal loans also offer you the option to hit pause on your payments when true financial hardships arise, whether you do so by forbearance or deferment

Private student loans, on the other hand, don’t offer any of the aforementioned borrower protections, at least not officially. And while your lender may agree to lower your monthly payments or allow you to stop making payments for a period of time if you reach out and ask for those accommodations, private lenders aren’t obligated to comply in this regard the same way federal loan issuers are. 

Furthermore, private loans often charge much more interest than federal loans, which makes them more expensive to pay off. Also, those interest rates can vary, which means you may start out with a certain monthly payment amount that then rises over time. That said, if you happen to have great credit, or have a loan cosigner with great credit, you might qualify for a competitive rate on a private student loan, so it’s an option worth looking into. Just know that generally speaking, you’re best off borrowing as much in federal loans as you can before moving on to private loans. 

Weighing your options

If you’re looking to apply to college, be sure to understand not only the costs involved, but also your options for borrowing money. It pays to obtain your degree as affordably as possible to lower your chances of graduating college with a pile of debt. Therefore, pay attention to not just the price tag of tuition, fees, and room and board, but also the details of your financial aid package when deciding on which school to attend.