Where do you want to go to college?
Some might think of this question in terms of academics. Others might have athletics foremost in mind, and still others, partying. However, choosing where to go to school is also the most important financial decision most teens have ever faced. Whether you are funding your school with a 529 college savings plan, student loans, earnings from work or the Bank of Mom and Dad, you'll want to make sure you get your money's worth.
Using data from the National Center for Education Statistics, MoneyRates.com looked at a number of factors to determine the best states for college students:
- Choice of institutions. There are so many variables that go into picking a school, and the more choices you have, the better your chances of finding the right fit for you.
- Average cost of attendance. MoneyRates.com calculated this by averaging the total annual fees and tuition for in-state residents living on campus (typically the cheapest option) and out-of-state residents living off campus (typically the most expensive).
- Student retention rates. Naturally, if a high portion of students are transferring or dropping out each year, it is a bit of a red flag.
- Graduation rates. This really puts the cost of college into perspective - if you don't graduate, the expense won't be worthwhile. So, the fact that students in Rhode Island (the best state for graduation rates) are better than three times more likely to graduate than students in Nevada (the worst state for graduation rates) means Rhode Island delivers better value for hard-earned student dollars, despite being a more costly state for college.
Based on these factors, MoneyRates.com has ranked the 10 best states for college students.
10 Best States for College Students
1. New York
With 230 four-year institutions, New York ranks second only to California in terms of breadth of choice. The average annual cost of attending a school in New York is $38,426, according to the latest released data. While that is more expensive than in most states, the fact that New York schools rank in the top 10 for retention and graduation rates means you are more likely to get your money's worth.
This state makes the list despite having one of the highest costs of attendance in the nation at $43,620. Why is it on this list? Because it is in the top five in each of the other three categories: choice, retention rate and graduation rate. That means Pennsylvania delivers value in exchange for the high cost of education.
The story here is similar to that of Pennsylvania - high cost but good value. In fact, at $49,015, the annual cost of going to college in Massachusetts is higher than anywhere else in the nation. However, with the second best retention and graduation rates in the nation, Massachusetts offers a particularly good chance that you will walk away with a degree in exchange for all that money. Massachusetts also ranks eighth in the number of college choices, which is pretty impressive for a relatively small state geographically.
If the northeast is not your cup of tea, Nebraska represents a quality alternative for college. The number of choices is more limited than in most states, but Nebraska ranks in the top 10 for retention and graduation rates. Also, at $30,864, the annual cost of college is more reasonable than in most states.
This state leads the way in the number of choices, with 259 four-year institutions. California is also in the top 10 for retention and graduation rates, which is just as well because the cost there is sixth-highest in the nation at $42,539.
For a West Coast alternative to California, Washington offers the sixth-best graduation rate in the nation, and it is also better than average on retention and choice while cost is around the middle of the pack.
Though not a standout in any one area, Michigan is in the top twenty for retention, graduation and choice, while cost is about average.
The strongest suit for Missouri is that it ranks ninth for number of choices. Retention rate is in the top 20, and cost is a little more affordable than most states. The graduation rate for Missouri colleges is just slightly below median.
9. Illinois (tie)
With 117 four-year institutions, Illinois offers more choices than all but six other states. Retention rate and graduation rate are in the top fifteen, though at $39,526, the typical cost of attendance is one of the 10 most expensive.
9. Virginia (tie)
Consistency rather than excellence in any single category earned Virginia a tie with Illinois for ninth place. Virginia is in the top twenty for choice, retention and graduation. At $37,847, the annual cost of college in Virginia is more expensive than in most states, but not by too much.
Tips for Paying for College
The states listed above tend to provide good educational value, but that doesn't mean that a college degree will be cheap. With annual costs ranging from around $20,000 to $50,000, you need to save wisely. Here are some tips for doing that:
- Start your 529 savings plan early. Contributions to a 529 account are not tax-deductible, but investment earnings are free from taxation. This means that the tax advantage of these plans increases the longer they are invested.
- Time your investments wisely. If college is still several years away, you can use growth investments like stocks, but then downshift to safer investments as you approach enrollment. Rather than just keeping money in a savings account, you can earn more interest if you invest in a series of CDs timed in sync with your upcoming tuition payments. Since 2 year CD rates are higher than 1 year rates, 3 year CD rates are higher than 2 year rates and so on, the longer you can commit the money for, the better return it will earn.
- Shop for the best interest rates. College savings can build up to significant amounts, so shopping for the best interest rates makes a particularly big difference.
- Don't pay checking account fees. You may need a checking account to meet routine expenses, and if so, you can save yourself some money by choosing a checking account that doesn't charge a monthly fee. Online checking accounts are especially likely to be free of these fees.
Investing wisely will help you pay for college, and making a wise choice about where to go to college will help those investments pay off.
Overall Ranking of Best States for College Students
If you didn't see your state on the best list, check out the overall rankings and rankings based on factors described in the study's methodology to find the right institution for you.
Rankings in All Categories
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